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  1. #431
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    I suppose that if we wait long enough, Auckland workers won't be able to afford to live in the city, services will degrade, other centres/cities will become more attractive to business/commerce, Auckland values will decline - and the cycle will start again. For those who live long enough!


  2. #432
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    Quote Originally Posted by Bjauck View Post
    Residents seeking a house to live in should be prioritised and non-residents seeking an investment should pay stamp duty or be restricted to building new houses. Otherwise people who work in the city will be increasingly excluded from owning a house here. For example:
    Cost of Auckland living forces police officer to quit
    http://www.nzherald.co.nz/nz/news/ar...ectid=11877760
    That police officer story is quite strange. Police are pretty well paid, but being a student not so much.

  3. #433
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    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  4. #434
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    Quote Originally Posted by artemis View Post
    That police officer story is quite strange. Police are pretty well paid, but being a student not so much.
    LOL. Auckland Police may be "well paid" or paid enough to be able to save a deposit and get a mortgage for a house 300+ Ks out of Auckland. He sees his only long term hope, to be able to buy even just a basic modest home in his home town of Auckland, is to go back to study to be a highly paid accountant or management consultant (b.com).

    Let's hope Accountants and real estate agents are good at keeping armed gangs under control....and good at nursing and teaching for that matter too.
    Last edited by Bjauck; 20-06-2017 at 08:24 AM.

  5. #435
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    Thanks for letting me rant on here about the housing market. Cheers.

    In other news, the big 4 NZ banks, ANZ, Westpac, BNZ and ASB all got Moodies down gradings this week. I'm sure that will have no effect on the business as per usual of lending huge mortgages to buy over priced Auckland Housing stock.

    To quote a Tui Add - "Yeah right"

  6. #436
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    Quote Originally Posted by Bjauck View Post
    Residents seeking a house to live in should be prioritised and non-residents seeking an investment should pay stamp duty or be restricted to building new houses. Otherwise people who work in the city will be increasingly excluded from owning a house here. For example:
    Cost of Auckland living forces police officer to quit
    http://www.nzherald.co.nz/nz/news/ar...ectid=11877760
    Pretty sure that he can move to another city and still get paid the same. Yeah sure he may be away from family and friends, but life happens. I think his letter i a bit of a cop out (just going by his letter). I earn around the same as him and through a fairly stable budget I am definitely not living paycheck to paycheck (live in Auckland) and saving (investing) for my future.

    I also believe the government needs an accommodation supplement for the police depending on the location where they work, like what the NZDF is about to roll out in July. Auckland needs to retain there police force and the cost of living in Auckland isn't getting cheaper.

    Disc: don't own a house...and with the market, not looking... unless mortgage rates sky rocket forcing people to default on their mortgages losing their homes and flooding the markets with houses.

  7. #437
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    Quote Originally Posted by Blackrose View Post
    If some one else could explain the great housing disconnect to me that would be lovely.
    If by disconnect you mean the disconnect between the price and what you actually get. I would suggest you have been fooled by central banks and inflation. Although it doesn't translate well below is a copy and paste from the nz reserve banks own inflation calculator.

    Housing
    that cost $100,000.00
    in quarter 4 of 2012
    would have cost
    $146,890.16
    in quarter 4 of 2016
    Total percentage change
    46.9%
    Number of years difference
    4.00
    Compound average annual rate
    10.1%
    Decline in purchasing power
    31.9%
    Index value for 2012 quarter 4 is
    1586.9
    Index value for 2016 quarter 4 is
    2331.0

    So over the last four years your deposit has lost 31.9% housing purchasing power. Although if you owned a house you would be quite happy with this.
    So what is the reserve bank doing about this situation http://www.rbnz.govt.nz/monetary-pol...rate-decisions
    Well today they did sweet FA and will probably continue on that path because all other developed nations are following the same playbook.
    For comparison I show below wage price inflation.

    Wages
    of $100,000.00
    in quarter 4 of 2012
    would have been
    $110,210.57
    in quarter 4 of 2016
    Total percentage change
    10.2%
    Number of years difference
    4.00
    Compound average annual rate
    2.5%
    Decline in purchasing power
    9.3%
    Index value for 2012 quarter 4 is
    25.2
    Index value for 2016 quarter 4 is
    27.7

    I see a disconnect between a 9.3% and a 31.9% decline in purchasing power.
    Last edited by Aaron; 22-06-2017 at 04:07 PM.

  8. #438
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    I guess the next question is what is causing the house price inflation. The underlying cause of inflation is usually that too much money is available to purchase too few goods and services, or that demand in the economy is outpacing supply. House hold debt has only risen about 21% over that period but not sure where RBNZ gets its stats http://www.rbnz.govt.nz/statistics/k...household-debt Also I don't understand M3 money supply so can't see if this has grown over the same period.
    Possibly immigration is a small part of the problem from a demand perspective. http://www.stuff.co.nz/business/indu...-holidaymakers. I don't really know but I suspect that low interest rates and QE internationally are playing some part.
    Last edited by Aaron; 22-06-2017 at 04:08 PM.

  9. #439
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    I know I shouldn't stray from mainstream commentators but I have a confirmation bias so need to look to the fringes to find it. Albert Edwards has been wrong for a long time but in case your like me and angry at central banks and central bankers.
    http://www.zerohedge.com/news/2017-0...entral-bankers

  10. #440
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    Quote Originally Posted by Aaron View Post
    I guess the next question is what is causing the house price inflation. The underlying cause of inflation is usually that too much money is available to purchase too few goods and services, or that demand in the economy is outpacing supply. ....
    House price inflation...perhaps boosted by:
    1. Recent low interest rates allow servicing of bigger mortgages.
    2. Financial market and security bias towards lending for real estate rather than for business.
    3. Taxation system bias towards investments with capital appreciation and negative gearing capability rather than income production.
    4. Small stock exchange (possible because of tax system and poorly developed superannuation scheme which would have invested in NZ companies) which would allow investment diversifcation
    5. Housing market open to overseas investors, who can bring in overseas money which competes with NZ residents relying on NZ money.
    6. Limited land in the places where people want to live.
    7. RMA
    8. Small market for building product suppliers.

    any other factors?

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