A house costing 7 times the average wage is historically high - suggesting NZ houses are overpriced

Another ratio is rent versus mortgage repayments.

Historically it has been cheaper to pay a mortgage then to rent. In Shrewd's example the mortgage repayments are $500 a week. You can rent a basic 3 bdrm house for $300 a week in Manurewa, A nice 4 bdrm place for $400 and a luxury house/small farm in Alfriston/Takininni/Papakura for $500 a week.

Again suggesting houses are too expensive in Auckland.

Is a house a good investment?

Property owners are now getting 5% yeilds gross - A $300,000 house rented for $300 a week. This is a poor investment.

Of course property investors are hoping for capital gains - whether they will get them or not - who knows?

Complicating matters of course are the tax breaks available to property investors and the ease with which you can use equity in one house to buy another.

However if you are leveraging you really, really, really need the value of your houses to be growing. If the growth stops or goes backwards you are in big, big, big trouble.

I will go back to NZ in a year and will probably be a first home buyer so I have been thinking about this a great deal.

I could buy a house with cash but all these over priced houses are really pi$$ing me off because I will have $300-$400,000 less to invest in shares.