One downside is their housing situation is on par with the Bay Area in a lot of places and neither of the two major political parties have committed serious resources to fixing the issue.
The only two political parties with solid proposals on this front are the Greens and TOP. TOP didn't make it into parliament in the recent election, and Labour did so well they didn't really need to give any major concessions to the Greens.
I see where the big parties are coming from -- if they increase supply so much that housing prices fall, a lot of people will be upside down on their mortgages. It's a hard problem.
It's basically last chance to get into the property market before that train well and truly leaves the station.
The crazy thing is my mortgage is cheaper than the rent I used to pay, so now I'm building equity and can get further ahead, yet ironically those who can't get a loan to buy a home can't save their way there either because the rent is too expensive and there's nothing left. I can sense it's becoming quite a bit trickier for those at the bottom end of society.
Still a fantastic place to live, but housing is likely to follow the same trend as other major desirable urban areas. It's basically regression to the mean.
Outside of Auckland, Wellington, and Queenstown it's not too bad.
NZ's population is also a lot more evenly distributed than most Australian states. NSW has 4 urban areas with over 100,000 people while NZ has 7 despite a smaller population.
If you're used to Australia, almost anywhere in NZ will offer beautiful surroundings. And, thanks to the broadband rollout, most towns have fibre and those without fibre have cellular that's fast enough for most things.
I look out over a harbour, about 75m from Auckland. Microwave gets me Internet access. Life is good.
> The crazy thing is my mortgage is cheaper than the rent I used to pay,
That's the normal state of affairs. When you buy something to rent out, there's no profit unless the rent is higher than the time value of the money.
There's nothing inherently wrong with renting rather than owning. Fiscally it doesn't make sense to buy a home unless you plan on living in that location at least 3 years, and probably more. Heck, just selling the house will cost you 6%. Having the house sit empty between renters costs a fortune.
Yes, that is definitely how it should be. Unfortunately the normal state of affairs is not the state of affairs in much of suburban New Zealand. I left Auckland eight years ago, and at the time rent was cheaper than mortgage payments with a ~20% deposit. The housing market is speculative, profits are on capital gains, which until recently were untaxed on land, and still "enjoy" exemptions. I understand for example, that if one holds a property for more than five years, it becomes exempt from capital gains tax. This seems far too easy a loophole to exploit. I suspect, although I'm not certain these days, that there is also a considerable supply problem driven in part by (1) the Christchurch earthquakes (2) a subsequent reassessment of building safety in Wellington resulting in many buildings being deemed unsafe and consequently closed (3) zoning policies.
Real estate is not guaranteed to always rise, as I've lost a lot of money doing that. Also, most people don't seem to figure in the cost of owning property when they calculate their gains, for example, omitting the 6% commission when you sell.
I agree that investment in an already very overvalued property market is unwise (except perhaps as part of a diversified strategy..?). Unfortunately, the capital gains tax status of real estate in NZ, and the leverage on your deposit (the bank charges 5% interest, you make 30% gains) and fast-rising real estate prices made and still makes it favorable to pay the 6%, rather than investing in the stock market, for example. This further inflates real estate prices as a speculative asset until you end up in a dangerous bubble that is difficult to escape from.
In a sane system, this wouldn't be the case. It's a problem the NZ government has repeatedly failed to solve, presumably because it would be politically risky. Instead it appears we've chosen by inaction to continue the course toward a real estate collapse. I guess perhaps then we'll learn hard lessons about diversification and tail risk..
We actually moved to a bigger house when we bought, but different suburb.
Depends on how much you borrow I suppose. Our loan was smaller than typical most probably, so we wind up paying about 30% less. But we were renting for $2k a month just 2 bedroom place. Would have been millions to buy that place too. Just getting to the point it's stupid.
I don't really know how we did it but we managed to get a decent place for under 700k, but average price is now about 1.1 million or something crazy. My sister has been looking and for what they want it's all north of 900k and incredibly competitive. So, I'd imagine the loan on that would be quite a bit more, and 30% more expensive month to month might be realistic depending on your situation.
At one point we were on a single income when I was just starting my career and paying that high rent with a new born baby in the house. It was tough. I can't imagine what it's like in single income households with multiple kids. The math just doesn't check out.
It's definitely a great place to live if you can afford it though. Insulated from a lot of the worlds bullshit.
> if they increase supply so much that housing prices fall, a lot of people will be upside down on their mortgages
That doesn't make the house any less suitable to live in. You're still paying exactly the same price for exactly the same house.
The only people that will hurt are those who have gotten a mortgage on a property, rented it out to someone, used that rent as leverage to get another mortgage, rented that out to, and so on, and those people are all absolute scum directly contributing to mass homelessness and a generation who can't afford their own roof to sleep under, so I have absolutely no sympathy for any of them.
Not a hugely tenable position politically, but I can't pretend to give a toss about someone who profits off of contributing absolutely nothing to society undergoing the same hardship they've caused their fellow citizens for the past several decades.
property rights is the basis of capitalism. the whole machine hums because there is an exchange of property, goods, services and money in a free market.
housing property is an immovable illiquid asset. it is not only an asset but it is also a speculative asset.
unaffordable property prices often benefit the governments more than property owners because its one way to extract hefty property taxes. so the only way to balance interest rates is to keep inflating the value of the homes. its like a ponzi scheme.
this usually happens where social programs are disproportionately shouldered by a narrow slice of productive earners vs a broader section of people who are benefit more from social programs than contributing to it..aka negative tax. imagine it like an inverted triangle/pyramid.
however, the solution to affordable housing is to build more affordable rental units. not create more home owners. if people can only buy the cheapest properties, how will they maintain it, pay interest on mortgage and pay property taxes? they are better off renting. why govts tries to create more home owners is the reason i mentioned above. to generate more property taxes.
the people who suffer most are the bottom most in the socio economic scale. home ownership is not for everyone. the saddest part is that they have them convinced that its a form of credit line and that ends up making it an even more potent speculative asset. throw in foreign investments in residential speculative housing market, it overheats. which will only make housing even more unaffordable. its a vicious cycle.
I feel the govt should build market rate affordable homes. Singapore does this. Germany doesn’t have an affordable housing issue. Most people rent.
My mother worked along with slum clearance board to build homes for low, middle and high income families by creating new townships. There are plenty of success stories.
In SF Bay Area, we have spent over 350 million dollars in just one year providing ‘outreach’ to homeless people. That’s just for one year. The money would have been well spent creating employment, building rehab, mental health facilities and groups homes/homes for the unhoused.
Speculation is a choice, not a necessity. Investors make that choice, knowing that governments will choose whether or not to support it.
Your economic reductionism is blind to political realities: a government that implements unpopular policies will most likely be voted out. Governments don't just create more home owners to generate more property taxes, they create more home owners when enough voters want to become home owners.
You say "home ownership is not for everyone" as though that blesses the status quo as some kind of natural permanent state. Home ownership is for those who can afford it. A reduction in prices (lower construction costs, greater supply, etc.) increases home affordability, which increases home ownership. Yes, it may never be for everyone, but equally it can be for more people.
Pension funds speculate on Wall Street. It’s all connected.
I am just saying that ..at least in the Bay Area..there is an incentive for the govt to keep home prices high.
Increase in home ownership doesn’t address affordable housing. It only addresses more tax collection and it also increases debt.
People can be housed if there are rental units. And yet that never happens in the Bay Area. Just talking about my zip code. And it seems to me that it’s by design.
As someone who just bought a 65sqm Unit (semi-detached) in a poor neighborhood near a city for half a million (first home) I'd be happy to see house prices drop... it will screw us in terms of a return on the investment but I can see past my greed. I feel tremendously privileged to be where I'm at and it shouldnt be such a privilege; your average income earner deserves this and better.
Probably because when someone takes out a mortgage and then rents the property, it's with the expectation that the rent will offset the mortgage. Therefore the rent costs more than it actually costs to live there as an owner because of the landlord's markup. Meaning fewer people can afford to live there.
The cost of the property reflects the value of the rents, the cost of financing, property taxes and maintenance. Rents are probably not that out of wack with the landlords costs. If the landlords revenue does exceed costs you could see it as either money the landlord needs to save for future major repairs like new roof, new appliances, payment for their labour, return on the down payment invested, etc. if you can’t beat them join them and if you can’t join them then maybe it isn’t quite so easy and cut and dry.
Because they're opposing the building of new cheap housing as it will decrease the value of their investment.
Additionally, artificially raising the price in this way will increase the amount of time for which the property is not occupied, but that's a relatively minor effect in comparison to the above.
Is it really comparable with the bay area? A quick scan suggests that the most expensive city in NZ (Auckland) sits at around NZ$1 million. Compare that to US$1.3 million for San Francisco. The rest of NZ is substantially cheaper, the second city Wellington for example is NZ$0.7 million.
Median wages appear to be about NZ$50k (all NZ) vs US$75k (San Fran). So on both absolute price and price vs income, only Auckland appears to be in the same ballpark as San Francisco.
Keep in mind that NZ 50k is US 25K and that an NZ$1 million house will be very small or very far outside the centre.
I don’t doubt that SF is more expensive, but it is bad in Auckland.
I don't know about the bay area but Auckland is pretty bad. The average house price is over 9 times the average yearly household income. Auckland's incomes being higher than the rest of the country.
Well, to call it completely hyperbolic without apparently looking for data yourself seems overstepping. Although perhaps this is a ploy to get the internet to do your research for you. In which case, well done.
Choose house prices against income at the bottom of the graph.
I was in NZ when the COVID crisis started. My flight home got canceled and a 3 week vacation turned into a couple months. The natural beauty was stunning and I got do a lot more canyoning/climbing than originally expected. Added to that was watching first-hand how Jacinda Ardern communicated with her country and a society that enforced strict social distancing. I got to travel around for a bit and never wore a mask once throughout the entire thing until I returned to the US.
Did you miss the absolutely brutal lockdown they imposed on everyone? I am staying far away from all countries that treated their citizen like prisoners until the pandemic is over — and I have forever lost respect for quite a few countries due to this.
I had the misfortune of getting stuck in Singapore on a 3-day business trip when things got locked down, and it turned into a 4 month miserable ordeal of house arrest and quarantines before I was able to make it back to my much more reasonable home of Hong Kong. Truly, from the bottom of my heart, fuck Singapore's lockdown.
> I am staying far away from all countries that treated their citizen like prisoners until the pandemic is over
Good — you're probably not welcome there anyway. The countries that did lockdowns and quarantine properly are the ones that have best controlled the pandemic.
It just wasnt like that. It was a logical step the majority of citizens gladly took to get to this comfy level we're at... balancing lockdowns and social/economic needs is a tremendous challenge. I dont know a single person who felt put-upon by the lockdowns, but I appreciate that there are people at the fringes who appose any and all restrictions like those of "lockdowns" but I'd pay that price again for this period of relative normality we get as a reward. Conspiratorial freedom-fighters... thanks for your service in guaranteeing that more lockdowns and disruptions are required.
A co-worker’s parents were visiting her in the Bay Area from their home in Vietnam. They planned to stay for a couple months to help with their new grandchild. Then covid hit and Vietnam locked down. They’re hoping to get home by Christmas.
I was there for the lockdown - it wasn’t that brutal. They publicly released the guidelines that police were using to deescalate and educate people on why they should go home. This is not to minimize what you are saying, as you are absolutely right that some regimes imposed some truly draconian policies.
This comment definitely should not have been downvoted. I am sorry you had to go through such an ordeal, and am sure you would have found NZ far more preferable.
My neighbour and his shooting club went rabbit shooting at an Otago sheep station. They ran out of ammunition before leaving the farmhouse. Their trucks were piled high with dead rabbits. The scale of the problem is almost impossible to understate, there are a lot of rabbits in Otago.
I was staying at a hobby farm and I was on the second floor in the loo when I noticed a shadow from above. It was a peacock looking at me through the skylight. They are evil evil birds.
> natural predators such as possums, ferrets, stoats and rats
As it says later, these are all introduced pests, and they're being eradicated for good reason. Peacocks will probably follow in due course, but they're not killing our native birds.
The natural predator that could have helped was the largest eagle known to have existed, but they've been extinct for centuries (after their prey species, moas (!) and other large birds, were hunted to extinction by people): https://en.wikipedia.org/wiki/Haast's_eagle
This article is mostly for the headline, I think. We have far worse introduced pests, e.g. rabbits do a lot more harm to farmers than peacocks.
Other than the Guardian article being completely false clickbait, and there being nothing like anything ever that could possibly ever oneday be considered as being anything vaguely similar to even a metaphor of a "plague of peacocks" . . . great article there, Guardian.
First I've heard of the issue. I think they have massively overstated it.we have a few pest species but I wouldn't think peacocks are much of an ecological problem. More likely an economic one to a few farmers.
And in other news, Australia was recently overrun by All Blacks. I think it's safe to say most Australian would prefer to take on the peacocks, although it has to be said we also lost the emu war https://en.wikipedia.org/wiki/Emu_War
My Dad helps organize a big shoot once a year which Ive participated in to cull a number of these birds. Luckily they are good eating and not too clever so you can flush them out and shoot them cleanly and you can honor them by eating them. As sad as the hunters would be there could be a more humane way of culling large introduced bird species like this... the way swans are culled is absurdly dangerous and inhumane imo, for instance.
When newspapers claim that "people is struggling with a new birds/pig/deer plague" it often has a direct translation as: "That's yummy, I want an excuse to shoot at it for free".
Those are just big pheasants, is not a health problem, and is a noisy creature, but otherwise harmless for man or pets. At 100 dollars the alive bird, losing some maize as exchange for a royal dinner is not a big fuss.
Maybe the time is ripe for a new exporting peacock business, from NZ to your table.
64 comments
[ 2.6 ms ] story [ 126 ms ] threadThe only two political parties with solid proposals on this front are the Greens and TOP. TOP didn't make it into parliament in the recent election, and Labour did so well they didn't really need to give any major concessions to the Greens.
I see where the big parties are coming from -- if they increase supply so much that housing prices fall, a lot of people will be upside down on their mortgages. It's a hard problem.
See https://www.rbnz.govt.nz/research-and-publications/speeches/...
The crazy thing is my mortgage is cheaper than the rent I used to pay, so now I'm building equity and can get further ahead, yet ironically those who can't get a loan to buy a home can't save their way there either because the rent is too expensive and there's nothing left. I can sense it's becoming quite a bit trickier for those at the bottom end of society.
Still a fantastic place to live, but housing is likely to follow the same trend as other major desirable urban areas. It's basically regression to the mean.
NZ's population is also a lot more evenly distributed than most Australian states. NSW has 4 urban areas with over 100,000 people while NZ has 7 despite a smaller population.
https://en.m.wikipedia.org/wiki/List_of_New_Zealand_urban_ar...
I look out over a harbour, about 75m from Auckland. Microwave gets me Internet access. Life is good.
That's the normal state of affairs. When you buy something to rent out, there's no profit unless the rent is higher than the time value of the money.
There's nothing inherently wrong with renting rather than owning. Fiscally it doesn't make sense to buy a home unless you plan on living in that location at least 3 years, and probably more. Heck, just selling the house will cost you 6%. Having the house sit empty between renters costs a fortune.
In a sane system, this wouldn't be the case. It's a problem the NZ government has repeatedly failed to solve, presumably because it would be politically risky. Instead it appears we've chosen by inaction to continue the course toward a real estate collapse. I guess perhaps then we'll learn hard lessons about diversification and tail risk..
How is that possible. Did you relocate or downsized? My impression of Auckland was it's 30-50% cheaper to rent. Maybe with new rates it's on par.
Last I checked house in North Shore rents for $700 while valued at some $1.3M - at current rates thats ~$1100 a week for mortgage.
Depends on how much you borrow I suppose. Our loan was smaller than typical most probably, so we wind up paying about 30% less. But we were renting for $2k a month just 2 bedroom place. Would have been millions to buy that place too. Just getting to the point it's stupid.
I don't really know how we did it but we managed to get a decent place for under 700k, but average price is now about 1.1 million or something crazy. My sister has been looking and for what they want it's all north of 900k and incredibly competitive. So, I'd imagine the loan on that would be quite a bit more, and 30% more expensive month to month might be realistic depending on your situation.
At one point we were on a single income when I was just starting my career and paying that high rent with a new born baby in the house. It was tough. I can't imagine what it's like in single income households with multiple kids. The math just doesn't check out.
It's definitely a great place to live if you can afford it though. Insulated from a lot of the worlds bullshit.
That doesn't make the house any less suitable to live in. You're still paying exactly the same price for exactly the same house.
The only people that will hurt are those who have gotten a mortgage on a property, rented it out to someone, used that rent as leverage to get another mortgage, rented that out to, and so on, and those people are all absolute scum directly contributing to mass homelessness and a generation who can't afford their own roof to sleep under, so I have absolutely no sympathy for any of them.
Not a hugely tenable position politically, but I can't pretend to give a toss about someone who profits off of contributing absolutely nothing to society undergoing the same hardship they've caused their fellow citizens for the past several decades.
housing property is an immovable illiquid asset. it is not only an asset but it is also a speculative asset.
unaffordable property prices often benefit the governments more than property owners because its one way to extract hefty property taxes. so the only way to balance interest rates is to keep inflating the value of the homes. its like a ponzi scheme.
this usually happens where social programs are disproportionately shouldered by a narrow slice of productive earners vs a broader section of people who are benefit more from social programs than contributing to it..aka negative tax. imagine it like an inverted triangle/pyramid.
however, the solution to affordable housing is to build more affordable rental units. not create more home owners. if people can only buy the cheapest properties, how will they maintain it, pay interest on mortgage and pay property taxes? they are better off renting. why govts tries to create more home owners is the reason i mentioned above. to generate more property taxes.
the people who suffer most are the bottom most in the socio economic scale. home ownership is not for everyone. the saddest part is that they have them convinced that its a form of credit line and that ends up making it an even more potent speculative asset. throw in foreign investments in residential speculative housing market, it overheats. which will only make housing even more unaffordable. its a vicious cycle.
Try saying that to r/NZ
My mother worked along with slum clearance board to build homes for low, middle and high income families by creating new townships. There are plenty of success stories.
Your economic reductionism is blind to political realities: a government that implements unpopular policies will most likely be voted out. Governments don't just create more home owners to generate more property taxes, they create more home owners when enough voters want to become home owners.
You say "home ownership is not for everyone" as though that blesses the status quo as some kind of natural permanent state. Home ownership is for those who can afford it. A reduction in prices (lower construction costs, greater supply, etc.) increases home affordability, which increases home ownership. Yes, it may never be for everyone, but equally it can be for more people.
I am just saying that ..at least in the Bay Area..there is an incentive for the govt to keep home prices high.
Increase in home ownership doesn’t address affordable housing. It only addresses more tax collection and it also increases debt.
People can be housed if there are rental units. And yet that never happens in the Bay Area. Just talking about my zip code. And it seems to me that it’s by design.
Additionally, artificially raising the price in this way will increase the amount of time for which the property is not occupied, but that's a relatively minor effect in comparison to the above.
Median wages appear to be about NZ$50k (all NZ) vs US$75k (San Fran). So on both absolute price and price vs income, only Auckland appears to be in the same ballpark as San Francisco.
https://i.stuff.co.nz/business/110049950/auckland-ranked-amo...
Choose house prices against income at the bottom of the graph.
https://www.economist.com/graphic-detail/2019/03/11/global-c...
And I saw many peacocks!
I had the misfortune of getting stuck in Singapore on a 3-day business trip when things got locked down, and it turned into a 4 month miserable ordeal of house arrest and quarantines before I was able to make it back to my much more reasonable home of Hong Kong. Truly, from the bottom of my heart, fuck Singapore's lockdown.
Good — you're probably not welcome there anyway. The countries that did lockdowns and quarantine properly are the ones that have best controlled the pandemic.
I know I’d choose an NZ lockdown over a Chinese one. Why do you think a lockdown in China would be less restrictive?
Singapore's lockdown was fine. I feel safe with my family here in Singapore.
This comment definitely should not have been downvoted. I am sorry you had to go through such an ordeal, and am sure you would have found NZ far more preferable.
I heard a peacock years before I ever saw one live. They lived about 3/4 of a mile away, but when the wind was right we could hear them.
As it says later, these are all introduced pests, and they're being eradicated for good reason. Peacocks will probably follow in due course, but they're not killing our native birds.
The natural predator that could have helped was the largest eagle known to have existed, but they've been extinct for centuries (after their prey species, moas (!) and other large birds, were hunted to extinction by people): https://en.wikipedia.org/wiki/Haast's_eagle
This article is mostly for the headline, I think. We have far worse introduced pests, e.g. rabbits do a lot more harm to farmers than peacocks.
https://www.stuff.co.nz/the-press/news/112964893/woman-brand...
When newspapers claim that "people is struggling with a new birds/pig/deer plague" it often has a direct translation as: "That's yummy, I want an excuse to shoot at it for free".
Those are just big pheasants, is not a health problem, and is a noisy creature, but otherwise harmless for man or pets. At 100 dollars the alive bird, losing some maize as exchange for a royal dinner is not a big fuss.
Maybe the time is ripe for a new exporting peacock business, from NZ to your table.
/s