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"our houses are less affordable. New Zealand's house prices are about eight times the average disposable income, while in Australia they are six times, and five to six times in the US."
http://www.nzherald.co.nz/section/st...ectID=10413381
It is worth keeping half an eye on Aussie demographics, facts and figure to see which way house prices in NZ will go.
A rational NZer would shift to Oz where the salaries are higher, the houses cheaper and the weather warmer.
However human beings are far from rational - just like NZ house prices.
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But that still has an interest cost, and if used for consumption, then cashflow is only reduced...then what if "da bank" tightens its residential lending criteria, and maybe the house valuation falls?
Bottom line residential has over shot fair value in NZ. As noted above, look at the US (they started this last boom first, led by AUS, then us...the US are well into the slump now, AUS are entering, so where is NZ likely to go?
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Jess9 - Bottom line residential has over shot fair value in NZ. As noted above, look at the US (they started this last boom first, led by AUS, then us...the US are well into the slump now, AUS are entering, so where is NZ likely to go?
The answer [?][?][?]- Same as, for sale signs are multiplying - The heart of the U.S. economic expansion has been the housing bubble, and it has burst. Much hot air has been created in the fervent hope of finding a bottom in the collapsing U.S. housing sector. Despite the headline number on October sales of existing home, the underlying data produced little that suggested a bottom is near. Sales of single family homes, like the one you live in, did improve in October to the second lowest level in a year. These sales are off 11% from a year ago. Condo sales are now down 15% from a year ago. Identifiable condo inventory for sale is nine months of supply. Prices of single family homes are down 3% from a year ago after rising $200 in October. Condo prices are off 5% from a year ago, and are at the lowest level in a year. In some communities, home sales are off 50% from a year ago. The economic repercussions of this real slide have yet to show in the numbers, but with foreclosures in the U.S. in a decidedly rising trend that will happen.
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http://www.nzherald.co.nz/section/12...ectid=10417812
There is nothing optional about old age, nor about many of the expenses, burdens and other liabilities it may bring.
A common mantra these days is "I'll never retire - I enjoy my work too much". That only serves, however, until some medical problem or other infirmity renders one unable to do the job as it must be done.
"Retirees of the present and future, on average, will be wealthier and healthier" than any past generation, notes a commentary in In the Vanguard, a newsletter published by the mutual fund manager Vanguard Group.
Good news, that - but tempered by a realisation that longer-lived retirees may have to make their money and other resources work for decades, not just a few "golden" years.
As healthier people live longer, they perversely may need more and more expensive medical care than ever. Inflation, compounding year after year, will have a greater chance to eat away at their money's purchasing power.
From a big picture, "macro", point of view, this is already shaping up as one of the major economic stories of the 21st century.
In the US, the irresistible force of 76 million baby boomers meets the immovable object of old age - starting, oh, any minute now. A similar process has been set in motion in other developed countries.
American boomers are accustomed to using their political and financial clout to reshape the system according to their needs and wishes. We want education, they said in the 1960s, and it was so. We want jobs, they said in the 1970s, and society accommodated them.
Imagine the fuss they will create as they check out the available choices in senior assisted living, geriatric medicine and such. You think healthcare is in crisis now? Just wait.
Faced with an approaching melee, social institutions have effectively ducked for cover. Reform Social Security? Oh, let's not do that yet. Shore up the old pension system? While we grapple with that, let's transfer as much of the burden as we can to private pensions. "More than ever, you are responsible for funding your own retirement," says discount broker Charles Schwab & Co.
It's a scary job, trying to meet the liabilities of an unknowable future with assets that must be gathered far in advance.
By the time you find out for sure whether your preparation has been adequate to the task, it's usually too late to do much to fix it.
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http://www.stuff.co.nz/3928206a13.html
Property buyers in New Zealand face lots of barriers, not least inadequate information. There seems to be far less freely available data on the property market here than in cities such as Sydney or London. You can find out for nothing that in Bondi Beach, houses sell at a median price of just over $A1m, that Balmain house prices dropped by nearly 5% in 2005. You can find out auction clearance rates, days on the market, levels of discounting. But as with most markets here, detailed house price information either costs or is closely guarded by those in the business, or is non-existent. Have you ever asked a real estate firm what a property sold for? We've never found them joyously happy to tell us. Imagine if people got wise and bid less? The horror. Far too much is anecdotal. One recent ploy we hate is the "upwards of" indicative price. A few weeks ago, we went to see a plain villa on a subdivided section in the poor part of an average suburb, hemmed in on both sides by rights of way. The ad said "upwards of $500,000". I thought again that, gosh, my toenails need a trim.
Another big jip is the oft-quoted median price rise. The median price is the price midway between the least expensive and most expensive home sold in an area during a given period of time. It falls when more people are buying cheaper homes than buying dearer homes, and rises when the opposite happens. It's a very rough average of price changes, as it measures only houses that have sold, so a 25% growth figure doesn't mean your house has risen in price by 25%, unless all the houses in your suburb are identical. And an increase in the number of houses sold cannot push up the average price, unless they are mostly more expensive houses.
The recent property boom has been fuelled by the absence of a capital gains tax on all investment properties, stamp duty or perhaps a mortgage interest levy. The Independent Financial Review argued if the IRD simply publicised and enforced existing rules on investment properties (tax might be due, even if you aren't in the business) it would have had an impact on the market. A change is too late for this cycle, but only structural change will make a difference in the next one.
What do I think? We've been talking slump for two years, but I do think one is coming, and might have started. After rises as high as NZ, house price inflation in Australia, the UK and US has fallen to near zero. The Sydney Morning Herald noted prices were in their third year of staying pancake flat, but the flashest pads, costing $10m-$20m, were still selling. Britain's south-east picked up again last year, but analysts say the market is dangerously stretched. If prices here fall, some value may return to the market. It's long been absent. Either way, we'll be out there, muddying our shoes, fingering the handouts, smiling through gritted teeth.
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No vacancy for renters
By Nicola Shepheard
Prospective tenants are bribing property managers and landlords with flowers, gifts and free labour in Auckland's super-heated rental market.
January and February have always been a landlord's market as students and professionals return to Auckland from summer breaks, but there are signs the competition is fiercer than ever in sought-after areas.
Director of rental agency Hot Property, Phillipa Gordon, said this month has been far busier than last January. She received 10 applications each for two $650 four-bedroom properties in central Auckland last week.
Andrew King of Auckland Property Investors' Association agreed it was "relatively easy" to find tenants, and said he had no trouble filling a house in December, which is usually the slowest month.
Another indicator is Trade Me, which carries rental listings for agents as well as private landlords. A Grey Lynn three-bedroom townhouse listed on the site last Sunday had been viewed 721 times.
"It's hard," said student Sammy-Rose Scapens, who turned up 15 minutes early to an open home in Westmere yesterday. Scapens, 19, said she tried to make a good impression.
"You try to talk to the landlord before everyone else does, get really dressed up."
Gordon has seen all the ploys. Offers to pay extra rent (two this week alone), business card flaunting, even personal bribes. Two friends vying for the same property were particularly inventive: one wrote a poem extolling her virtues as a tenant and gave Gordon chocolates; the other brought her flowers.
King's had offers to paint his properties and one builder offered to build an extra room for free.
Martin Dunn of agency City Sales sees fewer desperate measures for city apartment rentals, but said the market was surprisingly buoyant considering the influx of new apartments last year.
He said while numbers of overseas students may be down, there was a new trend of 20-somethings wanting to save on commuting costs and live in the city. He said a good one-bedroom place would rent within a week.
Rising rents do not seem to be deterring tenants. A December Massey University rental survey shows the national median weekly house rent rose 3.8 per cent last year, from $260 to $270.
Auckland's median rose from $320 to $330.
And rents are tipped to keep climbing. Andrew King said higher demand, increased maintenance costs, rates and insurance rises were all having an effect. He said high house prices were helping to push demand up, as young families were forced to rent for longer.
Hot Property's Phillipa Gordon said to win the race for good rental properties tenants did need to stand out. "But really pushy and cocky people are a turn-off."
Harrowing search for a home
I almost had to leave the room when the guy in the designer shorts said his flatmate was a landscape artist and would sort out the back lawn for free if they got the house.
We were six weeks into a harrowing seven-week search for a new home, and my patience for crass self-promotion was at breaking point.
When our landlord served us three months' notice in early December, my heart sank. I'd been there before - last time we found a place within three weeks. But this time we were five people looking for a four-bedroom house. I knew December in Auckland would be dead, and January murderous. It was. The open homes were like extreme speed-dating for a life-partner: 30, 40 people poking about, smiling at each other through clenched teeth, scoping out the house and the competition, on charm offensive.
Worse even than a media scrum.
Then there was the obsessive-compulsive scanning of Trade Me and newspapers, co-ordinating flatmates for viewings, discovering where our common ground ran out (in Mt Albert).
The application process was more rigorous than most job interviews I've had (three character references, car registration, make and model - would my beat-up 1988 Toyota be our downfall?).
Finally, when I was seriously reviewing my couch-dossing options, we got a call. The plac
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NZ houses among least affordable
Monday January 22, 2007
By Anne Gibson
New Zealanders are paying some of the world's highest house prices compared to our incomes and Auckland ranks alongside London as one of the world's most expensive housing markets.
The third Demographia International Housing Affordability Survey released today showed it takes Aucklanders 6.9 years of full annual earnings of $57,500 to afford the $395,000 median house price.
Auckland ranked 21st out of 159 cities surveyed, with the least affordable city being Los Angeles.
Christchurch ranked 31st out of 159, with its residents taking six years of $48,400 annual earnings to afford the $291,000 median.
Wellington fared better in place 47 with its residents taking 5.4 years (earning $61,400 annually) to afford the $331,000 median.
A survey author blamed tight land supply for New Zealand's housing squeeze, saying excessive land use regulation had strangled subdivision expansion and artificially pushed up prices.
In the past year, New Zealand house prices rose about 10 per cent, significantly more than the rise in people's incomes.
Most analysts expect Reserve Bank Governor Alan Bollard to hold the official cash rate at 7.25 per cent on Thursday - and give homeowners a breather from higher mortgage rates - after lower oil prices contributed to better than expected inflation figures.
Housing Minister Chris Carter told the Affordable Housing Forum in Wellington late last year that the Government had identified three new ways of solving the crisis - new uses of planning rules, special sector partnerships and Government-led development projects on surplus Crown land.
"People of my generation are deeply disturbed by the enormous difficulties our children face in getting into the housing market, and housing affordability is an issue preoccupying hundreds of thousands of young households around the country.
"The problem with supply is not that we haven't been releasing land for development as those who want to gut the Resource Management Act are fond of claiming," he told the conference.
Hugh Pavletich, Christchurch-based co-author of the survey with Wendell Cox in the United States, criticised councils for ring-fencing cities which he said was strangling the supply of land crucial for development.
"Houses should not cost any more than three years' annual incomes," he said, calling for more rural land to be freed up.
"Less than 1.4 per cent of our land is urbanised, so there's no shortage of land for housing."
The survey found Australians had the world's most pervasive housing affordability crisis, taking 6.6 years of full earnings to afford a house. New Zealand come in close behind, taking a median six years, followed by Ireland and Britain.
Canadians have the world's most affordable houses, taking only 3.2 years of full earnings to afford a median-priced place. Americans score close behind, taking just 3.7 years of earnings to buy a house.
The survey found many people living in North America were much better off than New Zealanders. Their housing markets are the world's more affordable.
Darren Gibbs, chief economist of Deutsche Bank in Auckland, said low incomes were one of the reasons for NZ's poor ranking in the survey.
"We have high house prices compared to low incomes and our incomes are low because we're not a productive country."
How many years to buy a home?
Number of years' income to buy house:
* Australia 6.6 years.
* New Zealand 6 years.
* Ireland 5.7 years.
* Britain 5.5 years.
* United States 3.7 years.
* Canada 3.2 years.
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From my personal side interest;) spec building experience hear in Queenstown where the current property market has been very flat for the last couple yrs
And with all the doom&gloom of houses in NZ being among the least affordable world wide-Queenstown- Central otago-surely must be the most expensive region nationwide
-Auckland's regional median house price climbs to $405,000
-To buy land in any of the new sub-divisons here your median purchase price would be round 300-400,000
-putting the average decent house(freehold newish 3brm+)
priced over 600,000 better areas 700k+
-Unless sections come down or building costs reduce prices can't fall
Unless like me your willing to take a $40,000 loss and sell well under valuation just to move on with other interests
- will be much pain to come for the big boys developing these many hundreds of apartments hoping for top prices 500k-1mill+
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JBmurc
Totally off subject. Copied this from another thread.
"started with 80,000 AGM shares today ,great med-long term buy Posted - 12/04/2005"
AGM would have been about 10c then, today hit 71.5. You will be very happy if you still hold??
Cheers
JK
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nan sold out stupidly, Joe
really guts me would have been up 40k-50k for only the last couple months,belived at the time because of how far out till they were acutally making good money some -mid 2008 so invested the funds into MCR who have the same MKTcap but are making serious money & production