Twyford points to collapse in home ownership rates in South and West Auckland since 2006 and investors hoover up properties; PM says home ownership rates falling all over the world, points to KiwiSaver HomeStart; Debate rages on 'crisis' and motel debts

Twyford points to collapse in home ownership rates in South and West Auckland since 2006 and investors hoover up properties; PM says home ownership rates falling all over the world, points to KiwiSaver HomeStart; Debate rages on 'crisis' and motel debts

By Bernard Hickey

Prime Minister John Key has downplayed data showing a collapse in home-ownership rates in South Auckland and West Auckland, saying home ownership rates were falling all around the world and the Government had helped a lot of people into their first homes through its KiwiSaver HomeStart subsidy scheme.

His comments came as he was challenged in Parliament by Labour Leader Andrew Little with Statistics NZ data showing home ownership rates fell across the poorest parts of Auckland and across New Zealand for every quarter since 2006. See the table below showing the data.

"I always have to check those facts when I see them from the Labour Party, but homeownership rates around the world, actually, have been reducing," Key said.

"One thing we do know is that under this Government we are helping a lot of people into their first home. One example of that is the nearly 12,000 people who have been helped into their first home under the KiwiSaver HomeStart grant scheme, totalling $55.6 million," Key said.

Labour Housing Spokesman Phil Twyford later highlighted the impact of rental property investors buying houses in poorer parts of Auckland, while home ownership rates in 'leafier' parts of Auckland had risen.

"New analysis shows the suburbs with the highest levels of speculator activity have had the biggest falls in homeownership," Twyford said, referring to research by Auckland University Property Lecturer Michael Rehm that showed rental property investors were buying up to 80% of properties in the cheaper suburbs.

“It’s clear what is happening here. National’s housing crisis is increasing the gap between those who are struggling and those in the leafy suburbs. The data shows homeownership rates in Herne Bay and St Helier’s are now increasing while in Papatoetoe and Manurewa they are falling," Twyford said.

“According to Census data, homeownership across New Zealand has fallen by 2 per cent. However, in Otara – where 80 per cent of properties were sold to investors last year – homeownership fell by 8 per cent, four times the national average. In Herne Bay it actually rose by 3 per cent," he said.

“Speculators are hoovering up the very suburbs that have traditionally been the places where Kiwi families have got their start in life thanks to affordable housing. This depressing tale of two cities is John Key’s legacy and the product of having ignored the housing crisis for eight years and allowing speculators to run riot."

'There is no crisis in Auckland'

Ministers have scrambled in recent days to say whether or not Auckland faced a housing crisis and whether the Government had done enough to combat fast-rising rents, even faster-rising house prices, falling home ownership rates, increased homelessness and massive, unpayable motel debts for homeless people.

Building and Housing Minister Nick Smith said on Monday night that people were dreaming if they thought homelessness in Auckland was a new thing energised the debate over the 'crisis' word, given Smith, Simon Bridges and the Prime Minister have repeatedly refused to characterise Auckland's issue as a 'crisis'.

"The idea that that suddenly happened in May 2016 is a figment of some people's imagination," Smith said of the homelessness issue, which jumped onto the news agenda a week ago after The Nation's report on people living in cars and garages in Auckland.

"These are long-term challenges," he said.

Smith told reporters in Parliament yesterday he did not want to waste energy debating whether Auckland housing was a crisis or not, instead preferring to call it a "challenge."

"That doesn't get any houses built. What we need to do is focus on those measures that will get more homes built, that will get more help for those families that are really struggling to get good quality accommodation," he said.

John Key also shied away from using the 'crisis' word when talking about it to reporters in Parliament.

"The opposition parties always use emotive terms like that - I think what's much more helpful is to say, what are the steps that need to be taken and are being taken?," he said.

However, Social Housing Minister Paula Bennett did acknowledge a crisis for those who were homeless, and said the problem had gotten more acute over the last two years.

"For those people that certainly haven't got one it is a crisis, without a doubt," she said. She walked off when pressed again on the issue, saying: "Thank-you, I'm done."

Twyford highlighted Bennett's admission, saying New Zealanders had known it was a crisis for years and that it had shown Smith was out of touch.

"I hope this is a watershed moment for the Government and I hope that in this Budget we will see some policies that will seriously tackle the root causes of the housing crisis, because I think New Zealanders have had enough of the stunts, the half measures, the spin that passes for a housing policy in this government," he said.

Unpayable Motel debts

The issue of Work and Income clients' unpayable motel debts has also bubbled up this week, with RNZ reporting that one woman with eight children had racked up a NZ$60,000 debt with WINZ because she was having to spend NZ$1,200/week on a motel room, having been banned from living in a Housing NZ home because of P contamination.

Labour called on the Government to look at waiving the motel debts, citing a total of NZ$417 million that was owed to WINZ for motels and other allowances. This figure was for debts as at the end of June last year and the motel debts are not broken out.

"These people are in a situation that is not of their making, it is largely a failure of government and that debt should be written off," Little said told reporters.

"Let's put a line under it, let's start again, let's get a Housing NZ that's actually doing its job and let's make sure we can get people into homes that can actually be safe and dry," he said.

"The idea that some of our lowest income people have debts of $100,000 or in other cases thousands and thousands of dollars because of a failing of our housing department, seems totally wrong to me. It's just compounding the problem, it's not going to help us find a solution."

Minister of Social Development Anne Tolley was reluctant to forgive the debts when challenged by reporters in Parliament yesterday.

"It might be a help to these people in particular, but what about the people who have worked really hard and paid their debt off in the past, and how much debt do you forgive, and when do you start?," she said.

However, the potency of the issue was clear in John Key's comments on RNZ this morning, saying the Government could potentially bringing forward a one week grant for motel stays from September. The grant was included in the NZ$41 million package of spending announced on May 9.

"We are looking at bringing that in as quickly as we can. The first date is September 1, but may potentially be a little earlier than that if we can achieve that," Key said.

"I never want to see people getting themselves into debt - it's one of the reasons why we took this step long before it was became this public issue," he said.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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I never want to see people getting themselves into debt...... he said

for once he is correct, it has taken his government doing nothing for years to get to this
The idea that that suddenly happened in May 2016 is a figment of some people's imagination," Smith said of the homelessness issue

Can someone please ask Twyford why Labour did literally nothing to stop house price rises, free up land or implement a more comprehensive CGT in either of the Income Tax Act rewrites they presided over? It's worth noting that house prices rocketed up under Labour and only the GFC bought them down - unless worldwide recession is part of Labour's policy platform for 2017 then he really shouldn't be getting a free pass on this one, given how little Labour has changed since.


Is looking back going to do anything today ? How about the incumbent Government is honest about the situation and makes a meaningful attempt at putting measures in place to allow a reasonable standard of life in this country.
All the rest, including the blame game is meaningless rhetoric that takes away from the focus that is required on the problem smacking us relentlessly in the face...

Looking back is important as it highlights the hypocrisy and the validity of their intentions. The housing crisis started well before 2008. Prices went through the roof leading up and NOTHING was done! The introduction of the accommodation supplement and WFF were only the usual ambulance at bottom of cliff answers. Both these parties just cannot be trusted.

To be honest about the situation requires you to look where the problem started. The reality is they shot up under Labour and they did nothing. Now Labour is attacking National for being similarly useless but cherry picking their data to do so.

Well, we're now post-GFC (kind of) and the societal costs of the stupid housing policies of the past are becoming apparent for all to see. Now more than ever is the time for the incumbent government to actually step-up and do something about the issue. Labour screwed up in the past but the current crisis is on National's watch, crying about what Labour did won't change this. Time the government did something productive rather than spew empty rhetoric.

They both need to - Labour has failed to articulate (realistic) policy and things they would do different and Nationa has its head in the sand.

We, the voting public, are to blame. Any policy that will effect our house prices is political suicide.



Wow, so your answer is to ask why this previous government (8 years ago) did nothing.
did people not vote national in to clean up labour messes.
next you will be saying its all the GFC 2008 also eight years ago or the CHC earthquake 6 years ago.
they have had plenty of time to do Something rather than deny deny deny and spin


True. Labour actually had a policy to try & reduce the speculator-friendly tax settings (deduct the costs, but pay no tax on the proceeds), thru promoting a CGT on investment properties. But his leader Andrew Little took it away, saying we're not having any of than nonsense. So Labour is implicitly favouring the continuation of the problem. They're in no state to criticise National.

Past is no justification to cover the present ills. Read house flipped to a Chinese buyer for over $175000 in 2 months TAX FREE nzherald. What is John key doing about it. If key says it's happening everywhere in the world then he might as well one day say look crime is increasing everywhere in the world so don't worry. Also he should look what's happening in Australia,UK and other countries to stop speculation and foreign buying. I am surprised why Labour don't argue with those points.

Seems to be that the current government is the one with the baton - no-one else

Ok, So the previous labour government handed the current government two time-bombs (AS and WFF) and a poisoned chalice in rampant migration fueling rampant house prices

Nothing has prevented the National Government from calling in the bomb-squad defusing the time-bombs and not supping from the chalice

No, there are no time-bombs. Nothing to do

Time-bomb? What is that?

Nobody wants their bribes money taken away though. Politically they couldn't remove those benefits and can't do it now either. All they can do is offer to give peoples money back to them and hope that is enough for the majority to turn a blind eye.

even worse - for all their talk about building affordable state homes - they built less than 100 in the last three years of their term - and the number of properties under HNZ ownership/management decreased in that period not increased -selling some of their 2 million + properties would allow them to fund NGO providers to build affordable quality sustainable housing - that better meets the current demographic need of people referred to HNZ - singles, 2 bed unit and very large 6bed plus homes - I am currently building some modern flats - 24 beds in total for supported housingin Nw Lynn replacing a tired ld 3 bed unit - HNZ could have part funded the whole complex for $400,000 and had usage of all the beds for 10 years!!


Annoying that they don't see housing as an issue for the younger generation. Rental laws suck, ownership is out of reach, salaries stagnant, growing older population. Recipe for disaster. (they wont be getting my vote next time round)


Crisis defined - "a time of intense difficulty or danger"

--Intense difficulty - anyone who doesn't own a house and lives in Auckland
--Intense danger - if this bubble bursts. Top risk to the NZ economy according to RBNZ

It's a crisis alright JK. Admit it. Then try and do something to fix it. Now!


Woh! Revelation! He's a lemming! "home ownership rates around the world, actually, have been reducing" So because the rest of the world's going down the gurgler, it's OK if we are too? Right wing economics driven by bankers at work.

many of us on here have been saying for ages that ownership rates are falling and it will be a long term problem for this country and future governments with subsidised housing that will grow the taxpayers expenses in years to come.
i can see future governments bringing in measures to control those expenses to the detriment of rental house owners and measures to also make it less attractive to invest in them


rental house owners? Oh you mean Investors! Of course, they're a major part of the problem and need to be squashed, thoroughly. They are greedy and manipulative. leeches and parasites that must be exorcised.

When it was first reported that 'investors' (speculators) were the most significant contributors to the Auckland housing prices/problem - about a year and a half ago, I think - I asked a straight out question on this forum.
Can't recall the excact wording, but I asked self proclcimed 'investors' here what thery thought of the statementn ad what they proposed to do about it.
As far as i can recall, nobody responded to my question....

Anyone have a tiny shred of naive hope that they might take a break from stuffing their pockets and swanning about for the cameras to actually to anything to solve this problem? Denial, looking vague and wandering off is an inadequate response. They're pathetic. So passive and useless.

Have they advanced the general election to this year ? Too much politicking going on about housing...
Let us focus on the next Auckland Mayor who may be able to do something really, not the Central Government, who has different priorities and different clientele.


Wow typical JK and national tactic, quick NZ needs a new anthem, what about a new national bird.
this is 90% central government, they set the immigration laws ( allow housing to be used) they set the tax laws they set who can buy houses in this country.
its time they stood up after 8 years of doing nothing, apart from blame everything on everyone else,
and got to work and fixed these issues

I've been among and seen a lot of folk, accepting responsibility for their own selves and making do with what they have in Auckland. With young families and financial challenges they quietly go about it daily. The high pitched whine of the loudly entitled panhandlers, ingrates and political point scorers who are simply insisting that they be allowed to the front of the line gets no respect from me, I will dismiss them and step around them with pleasure.

What is almost always missing from the tearfully hand wringing examples is the back story of poor choices disrespectful behaviour and complete lack of personal responsibility for both.

As for WINZ my simple observation is that, by and large, satisfied customers do not attack your staff, so no surprises there.

Banned from HNZ taxpayer funded housing because of P contamination and Little claims ‘ it’s not a situation of their making' …. how do those two things hang together ?

..because our drug laws are an ass. The proliferation of P is due to the cost and difficulty in concealing, dealing, growing and using cannabis generally. Most of these people would be happy with a joint. What would you choice of escape be if alcohol was banned and you dd not have the bach in Pauanui to escape to....a cup of tea?

I'd smoke /take my P elsewhere or outside if I gave a rats about the welfare of 8 children in the house and knew I was risking the roof over my head. But I don't do I. Whats another $60K for motel costs, them rich buggers can pay more tax.

..yeah but some just won't. So let them have what they want, which is cannabis. Then we don't waste zillions policing it, we can tax their use of it and we need not spend millions repairing state houses. And so ends the waste of public (ie yours and mine) funds.

You're assuming the P contamination was her doing and is not proven.

Hope these guys like eggs, cause they are going to get more than they can eat next election.

"These people are in a situation that is not of their making, it is largely a failure of government and that debt should be written off," Little said told reporters.

WRONG. This woman has had 3 houses, provided to her by the Taxpayer, test positive for P...with all the associated costs that go with that. Shes also managed to have 8 kids. Good to see Little putting the interests of a deadbeat ahead of those of long suffering taxpayers who go to work in order to fund this womans lifestyle. End rant.

so what is the point of letting her borrow money from the state to live in a motel with no hope of paying it back?.
you and me are paying for that, she may be feral and a problem but i would like a cheaper solution to solve it

And did any Dads out there get that useless kick the can down the road option thrown to them I wonder?

Yes, I am accusing WINZ of sexism.

AND she is only 28 with 8 children

I wondered how long it would be before someone attacked her. We know nothing of her story. You go to work to fund your lifestyle and nobody else. The political, tax and economic systems are complete f@#kups, attacking her won't solve any of the problems.

Actually we do know something about her - that she has made a succession of bad choices in life. Continuing to throw money at her wont solve any of the problems either. Whats your solution ?

Continuing to throw money at most of our problems wont fix them but we keep doing it don't we? Let's throw her into the streets then and be done with it. We all make flawed decisions and some have more consequences than others - that's life.

I don't have the immediate solutions except that we all might try to be more supportive and compassionate towards each other no matter what flawed decisions we've made. I'm sure you treat your family and friends the same way and expect to be treated the same. Why should that behavior be any different just because we don't know the person?

I dont disagree with any of what you have said. But in her case she has had plenty of chances and is costing the taxpayer a fortune (whats the cost of decontaminating 3 houses for starters ?).

Every dollar that is spent on her is a dollar that cant be spent on someone more deserving. How much could hospital waiting lists reduce if money wasnt wasted on people like her over and over ?

I understand Kermit.

We don't know for sure though that she is responsible for the contamination. I see it as a they said, she said issue according to the NZ Herald article. Why didn't WINZ step in sooner after moving them from the first house? The problem with WINZ is that all the policies and rules are set by bureaucrats and everyone applies a blinkered approach to them. There is no ability to think outside the box, no ability to say what other support (and it doesn't have to be money) can we offer here. How do we really help these people?

It does highlight to me a complete breakdown in society and community. This dog eat dog world we've created where everybody seems to be more concerned with getting as much as possible and everyone else be damned. We no longer look out for each other or concern ourselves with others wellbeing unless it becomes a detriment to us.

How do we decide who is deserving and who isn't?

"How do we really help these people?"

That's the million dollar question.

From my limited experience, by the time people are queuing up at WINZ they are probably already passed the point where they can be helped.

A benefit should really only be a true last resort option for a limited time. Family, Friends, Whanua, and the local community should all be helping out before WINZ.

In terms of poor decisions, the only way to help people is to get to them before they can make those decisions. WINZ and CYFS should really be focusing their efforts on children. They are the ones that really need the support.

In terms of this particular case, I don't know all the details, but I think it is a fair assumption that once is an accident, twice is a coincidence, three times is ...

Cut all support to her, remove the kids from her care, and use the funds to help them.

We should always assume that everybody is deserving.

heres a idea send her down the line to somewhere cheap buy her a house and give to her, 50K max , if she wrecks it with P her problem she can stay there, far cheaper than to keep paying motels etc

Yeah - easy to say

Somehow it stretches the imagination

Given her previous track record, plus the probability HNZ or WINZ do inspect and clear all state houses of contamination before a new tenancy begins

Given that too many state houses are contaminated you would think ALL parties (HNZ and WINZ and the tenant) would be interested in ensuring a new let is contamination free - before occupation

So we must assume that on each of 3 occasions this lady was located into a state house that may not have been tested, but WINZ for some unknown reason decided to have each one of her houses tested during her tenancy and before her tenancy was terminated - 3 times - wonder why - must have been a reason

Somehow that stretches the imagination

She is now on the conveyor belt. No getting her off - she's on it for life

So what do you suggest? Prison? Cause no one will employ her. This women is a product of failed political ideology. What she has cost the taxpayer is nothing compared to what these dumbass politicians have cost us.
I don't know what the answer is for a person as her, but I sure as hell know that no poly will fix it.

Well, its not so much about her, she has 8 children... it not their fault..... they didn't get to choose their parents. So what are you going to do about them Kermit? You have no damn answers beyond your rhetoric like the rest of the card carrying National supporters posting above. We will all pay very dearly for National's lack of leadership, in the end.

Im actually not a "card carrying National supporter", but dont let that stop you. Its simple. The kids are in a terrible environment as a result of their Mothers choices. They need to be fostered. Either within the wider whanau or with families that will give them a chance in life. Growing up in a P addled house is no place for kids.

So what government has ever prevented a bubble from bursting in the past? Be it housing or stock markets?

I have been reading on this website about how tough an unfair life has become, and thought I'm also a victim of this, and somehow, someone needs to help me, or change the situation.

I hate to break it to you all but:
1. We are all competing for finite resources
2. It will get worse as human population increases
3. You will remain a victim of the above as long as you rely on someone else to give up some of the resources they fought for themselves

Guess what, I decided not to be a victim anymore, and started fighting for my share. I'm buying a house in this market, and I'm OK with it!


if you're buying a house in this market you will be a victim.

No , he will not be a victim....... prices may adjust , but the long term trend in upwards , and there are many reasons for this

Developing land for houses is simply too expensive ( and getting worse)
We have circa 70,000 new migrants a year , who all need to be housed
Auckland council is making the situation worse , and have no will to change their policies
The Government has lost any ability to sort this out
Money is too cheap
Building costs way too high

He must bite the bullet and buy a home

No, we have 105,000 new migrants per year arriving - half going into Auckland

So.. prices may adjust. Prices may actually collapse at least 40%-50% in many areas, banks may restrict credit, interest rates may go up, rents may go down, salaries may go down but he wouldn't be a victim if he buys at the peak of the bubble?

By the way, as soon as the productive economy in NZ suffers and unemployment increases (and salaries go down) the net migration will be negative again as many tens of thousands would leave the country if they can.

A lot of variables on this equation. What do you think it will happen with our banks and cheap credit when the bubble burst in Australia? In Europe the bank results are quite bad due to the low interests. I don't think interest will remain low for much longer..

There's about two years worth of low interest rates before oversupply issues will start clearing up globally. Then the pressure for interest rate increases will kick off.

Prices may actually collapse at least 40%-50% in many areas

HAHAHAHAHA. Not in the main cities my chap. Not even in your wildest dreams.

Do you really think a $1 million dollar home will suddenly have a price tag of $500k?


prices fell up to 50% in a lot of areas in Dublin after the GFC.
Something is only worth as much as somebody is willing to pay for it.

LOL if prices were to ever fall by 50% it would be a great opportunity for us to buy 3 houses for our children for the price of 2 .

And I could afford to do it .

Unfortunately it will never happen , never ever

Not convinced that any of them will be long term problems, times do change. Politics change, migration levels change, interest rates change, building and developing costs are not necessarily much more expensive in Auckland than they are in parts of the country not currently suffering from high house prices (price of land is a much bigger difference and can also change). Hell of a gamble leveraging into Auckland property at the moment.

I felt like a victim buying two years ago. Now it's worse for buyers. All a buyer needs to hope for is that the price doesn't fall in the future to a point where the mortgage is underwater.

The other concern that most first home buyers aren't aware of is that until they get 20% equity for their next house upgrading is difficult.

Multichoice question for you. You pay $1M for a house today what do you think is the most likely price that it will be worth in 15 years time ?
A. $500K
My money is on C and if the world turns to custard and NZ becomes more of a "safe house" than a tax "safe haven" then even D is possible. You need to get your head around how much money the top few percent of the worlds population has and what will happen when they all want to start moving here. $4M is loose change for some people to enjoy what we currently take for granted in this country.

Where's the house? location location location,....

Doesn't matter where the house is, if its currently worth $1M it could be mine on the North Shore. Clearly at $1M your not living in the dodgy parts of South Auckland.

Therein lie the real issues Groen.

We are competing for finite resources.
Believing that we have fought for our stuff and it is all mine, mine, mine.

That's the harsh realities of life out here unfortunatly


There is only one way to describe the housing issues in NZ and that is it is one big F&^KUp......and both the Government and opposition parties need to shoulder responsibility.......I am sick and tired of hearing the pathetic questions and answers in parliament. The fact is every time National touch something housing it puts the prices of houses up which makes them increasingly unaffordable especially in can't keep adding costs to something and then expect that something to reduce in can't keep paying WFF and other accommodation supplements as they distort prices as soon as you assist FHB or any other group that assistance package increases the price.....why can't people get this through their thick heads is beyond me.

Take the increased costs of Health and Safety that have been dumped onto society what is the cost effect of this new legislation on house prices? I am estimating that it could add in excess of $40K to $50K to a the price of an average new build.......Each house built will have to have a designated officer to comply with all the requirements so that is one full-time person in paid employment being added to the cost of a build. If you don't have a full-time person on site well your probably not going to be compliant with the legislation.......the amount of paper work that is required is huge.......there is not enough time to be a full time builder and complete the paperwork and other obligations that are required.........

The opposition parties don't give a toss about housing affordability or the social implications either......they keep wanting more and more costs added to the system which puts prices up further......NZ actually has the biggest bunch of failures sitting in Wellington........they have failed in delivering the constitutional rights of the people of NZ!!

agree. they've been adding fuel to the fire, rather than putting it out. Economics 101 please nats. Reduce demand (e.g. no foreign buyers, less immigration, land tax for investors etc...) and increase supply (e.g. build more quickly, release land, infrastructure bonds etc...) = lower price. More subsidies, like higher accommodation supplement increases demand, more money chasing same houses = higher prices for everyone.

"The fact is every time National touch something housing it puts the prices of houses up which makes them increasingly unaffordable especially in can't keep adding costs to something and then expect that something to reduce in price"

Couldn't agree more, which is why it confuses me when you here people (Especially on this site) clamoring for CGT or Land Tax. In what world will they lead to a lower price?


How galling to see JK joke about this, i say sack the lot of them and start again, pay them the average wage and take away their gold plated pensions.
As for the 28yo with 8 babies.... Succesive goverments in NZ have facilitated the breeding of idiots, more babies= more money.. what did you expect?

Home ownership should be a priority for any New Zealand Government. It's a big support for social stability, well beyond the economic benefits. We should be trying really hard to get that percentage up, even to the extent of having a 25 year plan.

Agreed , but we need to leave the free market to sort out the housing at the upper levels , with the Stae responsible for the indigent and poor


There's no free market. What we have in NZ is a real estate-welfare state with rent subsidies and generous tax deductions. We're collectively getting milked by foreign "investors".

@fatpat , there is a free market in housing , its just distorted by tax breaks for investors and housing/income subsidies for renters .

The housing market is the epitome of a free market , where buyers and sellers meet , have access to full information , and are not restricted from entry

I agree Social stability is paramount.....
But lets give Social Stability a meaning because some people see it as something that one provides for themselves while others see it is something the Government supplies.

Social Stability in my view is allowing people at all times more than enough scope (spare capacity) financially to take care of their needs and the needs of their family both now and in the future.. And one should include enough spare capacity for a person to be able to support their voluntary community projects. Social stability comes from not allowing outside/external interference.
No need to get into education, health and all the other concepts for if one truly has social stability then there is room/space/money etc for the latter issues/things!

If motelliers are being paid $1700 per week for a room, they're also ripping off the system.

That is more than they charge tourists.

...must be a mighty fine motel

...well...I'd say its a matter of tme before they are also suiing W&I for the meth repair jobs that the tenants placed in there cause. More and more taxpayer exxpense on the way..

Pretty fair price for a room of 9 dwellers

This denial of this issue is beyond the pale, insulting in fact, and the article from the herald where a very average house in the average part of the north shore was onsold for $195k more in 2 MONTHS to a phone bidder from china shows how screwed we are by our hear no. see no, speak no, government (that sadly I voted for ...:( )
And its not just first home buyers who are hurting. Those of us whose lives took unexpected turns cant get in now and its bloody scary later in life.

Some of us in our late 40's are frankly terrified of what to do - I got cleaned out in a divorce and was locked out of the market while it took off.....painful.

Now it seems I have Sophie's choice..

Do I play the game and buy in at crazy money on the North Shore (prob $900k) for a dump when only 20 years from retirement (hahaha - as If I'll be able to retire by then) or just save a load of cash away with minimal return (which I then pay tax on v tax free on a house?)

Would be very interested in sensible feedback as I'm mentally and emotionally exhausted and deadlocked on it..

My logical mind says this insanity and "investor" hysteria must end - but there's no political appetite for it and when, and then how far would a correction be if it happened - and would that make much difference over a 20 year period for something I want to live in anyway - not "flip".

But my emotional mind is fried by watching this market disappear into the distance - I need to be in Auckland for my kids.

My new partner and I have $120k cash saved already and earn in the low $200'k between us so not struggling cash wise but the quality of the places for nearly a million dollars is appalling and the "value" is non-existent compared to my rent scenario...

What to do - save cash (and be taxed on gains) and be debt free - but a tenant (which feels crappy) or smash the mortgage fast (hopefully in around 10-12 years) and have any gains tax free for later years?

Move buddy...I get the family connection but really just how good is Auckland now? Sprawling car infested rat race with a waterfront gated off to protect new cars arriving. Cost of living and under lying stress...pack your bags I say and don't look back.., the family can come visit you.

Hi Frazz, once my oldest is independant I'm out of here to somewhere rural...
I dont even recognize my beautiful city anymore anymore...the rate of change, congestion, demographic,attitudes is frightening but until then there's no way I could live without my kids.

Totally understand, I travel back often (family) and wonder what happened to once a great place to grow and raise a family. Cant even walk across the harbour bridge yet...

when house market will crash all your money will become nothing and if bank will go on bankrupcy all your deposit is gone forever

Personally, I wouldn't borrow 900K to buy at this time Fiander68. If the market corrects, it would mean I'd have negative equity, meaning I couldn't retire out of Auckland in 20 years time. But for people that have been thinking like this, it's been a painful and worsening situation as prices have just kept skyrocketing. Good luck!

Yes that's my fear - to be that debt laden at this stage of life on an "asset" that is really pretty poor and it seems inevitable that there will be a huge global issue in the not too distant future - how long can this credit fueled frenzy last? But it never seems to slow down....

And part of me just wants to refuse to play this game that everyone else wants to - always been a contrarian.... damn it.

$120K will get you a fine vessel suitable for your family, berthed in an Auckland marina. It's a very nice lifestyle many enjoy without all that RE stress nor bankster slavery.

Thanks Bender - yes I've been thinking all angles rather than be a sheep....

We've even thought of us saving a bucket-load of cash (worked out we can save over $1M just over 10 years and then buying a luxury coach/motorhome (which seems cheap at $200k) and travelling around NZ doing the R.V thing rather than be trapped in a crappy apartment here...

Its hard when everyone is saying buy buy buy before its too late...and the gains of 10% tax free every year are very tempting even though they must stop at some stage

And everyone knows a boat is such a fine investment.

Such a good investment that the boat needs to be coupled with a 7 year loan. Provided the boat doesn't sink, get washed out to sea or otherwise end up underwater, then it will still be financially underwater.

We're talking staying sane in the midst of RE insanity. Does everything have to be seen as investment potential?

You think you are screwed, 51 yr old also cleaned out in a divorce,zip savings, no partner 50/50 custody of school age kids, 1.5 hour commute to their schools and a subsistence job., ex-stole the house, 35k year income, all family and friends in this city i have lived in for half a century, stop bleating! Your situation is infinitely better than mine.

hmm ok - I was just asking for feedback and am sorry to hear your situation is bloody tough.. Hope things pick up for you.

I hear you both and can relate. I'm leaving Auckland for the winterless North to start from scratch at 41. My 15 year old son will be staying in Auckland. Mentally, emotionally, I'm almost done and the whole retirement, house seems like a nice fairytale.

Fiander68 - mate, you've got it pretty good. Decent coin and the support of a partner which can make all the difference these days. You've said you plan to head somewhere rural so keep that dream in mind. You could look at buying land somewhere now or in the near future without having to borrow. When the property market corrects and in my opinion it has no choice, even if rural prices go down you won't really be affected. Don't listen so hard to everyone else. Find what is true to you. The story that worked for the BB generation and many of X is no longer viable.

Hi Meh - yes you are right - my situation (now) is pretty good - I should have worded my original email differently in the terms of a mental battle of emotion v logic...but I guess all markets are driven by emotion right..

Also and I cant stress this enough - I really do feel for the next generation who may not come from money - I simply cant believe how they have been screwed over by pure hysteria and greed,

The NZ I knew seems to have gone and some of us sold our kids future to the highest bidders ....tragic

Errr $900K doesn't buy you a dump on the North Shore, what are you looking at ? cliff top homes ? still plenty going for less than $900K. Sure you now need $1.2M to $1.4M for a brand new huge house but the average price on the shore would put about 40% of houses at less than $900K. Your easily earning enough mate, I did it for a while on a single income of $50K until I found a better job. My mortgage was paid off at age 48.

with the way the tax laws are now you would be better to buy a rental and use both your extra cash and the tenants rent to try to pay off

Buy an apartment in the city and live happily ever after...

Last week at auction, a house (one of two, cross lease) half share of 800 sqm, house area 120 sqm, scope to add on, sold at Mt Roskill for 680k..good enough ?

No one know which way the market will go so think through the options. Market goes up - sounds like you don't particularly want to retire in Auckland so you lose out on capital gains if you don't buy, but not much else. Market stays put - you would have saved more renting but no big down side to buying. Market goes down - you're underwater and can't move. So long as you're reasonably happy where you're renting, I'd say wait because there's a big downside there that has to have at least a 10% probability (my gut says a big crash is at least a 50% probability but who knows).

All it shows is the richer are getting richer. Look at the home ownership in the expensive suburbs and look at the investor ownership in the poorer suburbs. The divide between the haves and the have not's is now a crevasse, you have it sweet once you work hard, are smart with your money and finally make it to the other side. There will always be a percentage of people who will never own a home, they could win $1M in Lotto and still stuff it up. Plenty of people are just no good with money and cannot be helped.

The shortage of property at the moment in Auckland seems more acute than It was even a few months ago. Very few semi decent properties coming on to the market although I admit it is hardly peak season.

finally the cat is out of the bag, us taxpayers are footing this cost
Rt Hon JOHN KEY: Because it is a statement of absolute fact that Minister Smith has done a great deal in the housing area, including seeing $34 million a week used to subsidise New Zealanders into housing
Hon BILL ENGLISH: It is important to understand that any initiatives come on top of $2 billion that was spent this financial year—over $2 billion—to support 300,000 people on the accommodation supplement and 60,000 households on income-related rent.

quick lets all buy rental houses and jump on this band wagon
Rt Hon JOHN KEY: , $2.4 billion on Working for Families, $1.2 billion on the accommodation supplement, $800 million on income-related rents,

Yep, that's entirely rational demand from somebody who wants to live there, Suuuuuuuuuure it is. And I am Princess Diana.

What will it take before the people revolt against this?

If things keep heading this way before next election (pretty sure they will, just a hunch) then I think maybe many will be investing in a motorcycle helmet and some football padding. Going to get rough on the streets

Wishful thinking. The numbers of AKL property owners who are quietly not unhappy about price trends, massively outweighs the frustrated victims of this lunatic bubble. Even if housing were to burst, the speculators will froth at the mouth but most middle NZ owners will shrug and dig in. The eyes of the housing excluded will light with hope. Hardly the makings of a people revolution.

Hey Middleman
True, but I think the gap is closing...renters make up what 40-50% of Auckland's population now right?
And growing.
What the frothers don't get is that the more the bubble expands, the more likely it will all explode.
Actually I think mortgage owning middle NZ would still be whacked - many people borrow against the value of their homes, also a crash would lead to a lot of unemployment pain which would hit middle / upper middle income earners as well as those near the bottom. A lot of people in finance, construction, design, consultancy etc would be crippled

Yep, no doubt there would be much pain but we would carry on without bloodshed - metaphorically or as some seem to want, literally. Construction and associated activities have a long track record of fairly efficiently expanding and adjusting to demand - albeit with a lag. Migration would abate, we'd lose some good people but we'd survive. The dairying slump was supposed to be the end of the world but then tourism and horticulture stepped up.

Can someone please explain to me how immigration is monitored / adjusted? The numbers are mainly supposed to be based on skill shortages, surely as more kiwis have returned in the last 1-2 years, and less have left, the govt would make an adjustment (down) on letting in non-kiwis (except in areas where the kiwis are't filling the gaps)
Any thoughts on this appreciated

Apparently New Zealand has had a shortage of 'chefs' according to the skilled migrants we're currently importing.

Ahahaha. Short answer. They aren't.

Key must be starting to feel the heat. He was behaving much less like a moron than usual during that question.

This why Key CANNOT admit to a crises or admit to issues with foreign buyers with our housing. We risk trade deals if we make any manoeuvre to prevent foreign buyers from picking up a bit of kiwi land. See
We have sold our sovereignty for global trade and we can't do a damn thing about it. They fv(+ us.

This whole issue to me highlights how democracy doesn't work, especially when the voting majority have lost the plot (they've got a disease called 'Capital Gains Brains' which prevents the ability to think and act rationally).

Winston Churchill - 'The best argument against democracy is a 5 minute conversation with the average voter'.

Self interest becomes a problem when governments pick sides rather than governing for the greater good. We will simply reap what we sow as the 45% take us all over an economic cliff face

the ignorant huddled masses, fools every one, lumpen proletariat ruled over by a corrupt bloated elite. Time to try another system than democracy. There are plenty of successful models to chose from, like ..... um ,err

The reality is we are not allowed to suggest viable alternatives to democracy. We are being occupied by a Globalist authoritarian dictatorship. Just got to make the most of it, take advantage where you can and try and survive. It's fairly easy if you "play the game".

who is stopping you from suggesting alternatives , this is, like, man, a democracy after all

Interesting punctuation. You are right, we can suggest here in NZ. This probably makes our real estate even more valuable now I think about it. I keep thinking globalist hence my mistake.

From a capital gain/investment point of view what do people think of these statistics - is it better to buy in a suburb of high home ownership or high landlord ownership? If landlords are bidding against home owners and winning then I guess it would be better to buy in a suburb where the trend is for increasing landlord ownership but when a critical point is reached the suburb may get untidy with so many renters not really caring about their neighborhoods and prices could decline. My gut feeling is to hold out in the areas of high home owners. As the outer suburbs get shabby and lawless the inner suburbs will really start to shine. What happens in places like Brazil? Not making a moral statement here - just riding the tiger!

In Rio there are quite a number of favelas located in what you might expect to be premium locations (e.g. on the hill overlooking Ipanema). Maybe we could set up a camp around Bastion Point if you were worried about prices getting too high over there?

Start building the cardboard and corrugated iron shacks somewhere central. It needs to be conveniently located for both walking to work and burglaries. Last thing you want in a carjacking is to be stuck in traffic.

very good!

At first I was sympathetic to the plight of the mother of 8 in a motel room , until to awful truth about her came out .

Now I have little sympathy for the mother , but I hope CYFS are doing their job and have been keeping an eye on the wellbeing of the kids

What has happened to our PM that is mot able to see and hear the plight of the common people. Definitely power has made them arrogant and stuborn not wanting to listen to anyone. Time f0or a change in govt.

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