Great comments Logen. House next door has the for sale sign going up for auction Feb 18th. When we moved to this new neighbourhood sub-division here in Chch 2010, the price of the section was $185K and to put a house on of average size 210m2 was around $240K so $425K. House down the street of similar size and land sold for $1M last year. My neighbour, he's aiming to get $1.3M
How sustainable are these price rises? in 11 years a 3 fold gain? You hinted a windfall to the boomers. But if these families are not roughed up, most downsize and give the remaining proceeds to their adult children as they move away. No more are the days where a school grad could earn enough $ to pay for the mortgages required to buy a house. That pool is only for the top 1% crowed. Typically the ones that have gone to private school and whom their parents have been able to fund their whole education and training to ensure they reach top level. It's a social divide the way I see it, mixed in with using houses as a commodity asset of achieving financial wealth.
As I mentioned before, 2/3rds of NZ's wealth is tied in real estate. Over in N. America, it's 2/3rds of their wealth that is tied into businesses and in their stock markets that create new businesses. It's not hard to see this distinction when you compare NZ's GDP/capita figures with US or Canada's GDP/capital. We ARE a low productivity nation because we pool most of our wealth in houses. It's a key reason when the UN rapporteur visits NZ, she complains on NZ's lack of progress in making housing affordable (as per UN's belief, housing is a "human right") - and NZ has done poorly by look at the long list of social housing claimants. This social divide, I point to the top 1% of the wealthy neglecting the rest of society as more of the middle class gets shoved down to lower income class. To be able to start from nothing, to being able to own a home is a monumental step for the middle class, and as time carries on, you will find that more and more people will be left behind, without a chance to get into a home. I call it a cane-ing.