Which way will the property market go now?

[ynot]

Bang on mate. Its our obligation as Kiwis to be screaming from the rooftops. THIS IS NOT GOOD ENOUGH. DO YOU JOB !!!

[Joshuatree]

Many , not all, of these house investors are the disgusting ones on an uneven playing field , running those houses at loss , claiming interest and all manner of things deducted, raising the rent at any opportunity and not maintaining their properties. Thank Dog its changing and first home buyers have more chances here on and renters have more rights. Greed and materialism ahead of ethics, caring or compassion.

[iamaskier]

I should probably clarify couple things.

I lived in a car because I wanted to, not because I had to. It was only for couple months and one of the best experiences. Living like this allows you to travel and save at incredible rate. And I just bought this year, so you'd be wrong if you think I'd change my opinion if I was just starting. I am actually starting on my way to get deposit on investment property.

I don't think the house prices should rise in a rate they do now. I think healthy growth between 3-7% should be the goal. However I don't blame landlords one bit for the prices. The blame is 100% on governments. The issue is not of people investing in housing, rentals are necessary. People need rentals for various reasons. The issue is with building regulations, NZ approach to living in houses and goverments ignoring the issue. What current government is doing is shameful shifting of blame to people who provide rental accomodation in a time when there's 20000 people on HNZ waitlist. I don't think Labour made the crisis. They just ignored it and instead of trying to solve it they are now panicking and trying to use envy to redirect public anger to somebody else. This is disgusting.

I certainly don't begrudge the player but I reckon from a societal good perspective, the game is f##ked (and it seems we agree). There will always be people who manage to make the leap (and again good on you) but what I don't like seeing is that this is rapidly becoming the exception rather than the norm and encompasses and ever shrinking set of personal situations. I generally agree with what you're saying though with the added caveat that some of the bleating from pockets of landlords has been a little on the nose.

I feel like this garners way less attention than it should and I cant help but think that we haven't cottoned on to how much we're embedding a 2-tier society and that young people on a large scale haven't fully had the reality bite yet.

[artemis]

.... Personally, I've seen the value of property go up hugely but it honestly brings me zero joy while I watch friends who would meet any definition of "good with money" struggle to get on the ladder because they didn't buy 3 years ago or had a kid so were down to 1 income for a bit or had the audacity to work and travel for a year or two or any number of other things that have suddenly become barriers. How are we prepared to accept this?.....

An excerpt from yesterday's article at the below link -

''The Home Loan Affordability Report shows first home buyers in Auckland would need to save $84,400 for a 10% deposit on a home at the region’s lower quartile price of $844,000 in April. That would take a couple working full time at the median rates of pay for 25-29 year olds in Auckland just over four and half years if they were able set aside 20% of their after-tax pay each week, which would be no mean feat.''

Is it really no mean feat to save 20% of (median) take home pay for a few years? Depends on what they are willing to do to save - forgo instant gratification, upskill, overtime, second jobs, live at home, take in flatmates, delay babies, live carefully, lower expectations, plan ahead - can be done and plenty do.

Of course it is harder for a single person or a single income household.

The article does make the point that serviceability can still be a barrier. But those that increase their skills and income while saving a deposit have improved their servicing position.

https://www.interest.co.nz/property/...eclining-april

[iamaskier]

An excerpt from yesterday's article at the below link -

''The Home Loan Affordability Report shows first home buyers in Auckland would need to save $84,400 for a 10% deposit on a home at the region’s lower quartile price of $844,000 in April. That would take a couple working full time at the median rates of pay for 25-29 year olds in Auckland just over four and half years if they were able set aside 20% of their after-tax pay each week, which would be no mean feat.''

Is it really no mean feat to save 20% of (median) take home pay for a few years? Depends on what they are willing to do to save - forgo instant gratification, upskill, overtime, second jobs, live at home, take in flatmates, delay babies, live carefully, lower expectations, plan ahead - can be done and plenty do.

Of course it is harder for a single person or a single income household.

The article does make the point that serviceability can still be a barrier. But those that increase their skills and income while saving a deposit have improved their servicing position.

https://www.interest.co.nz/property/...eclining-april

Depends on rents which I'd say chew up a fair bit but in general terms, you'd hope 20% was achievable.

As you've alluded to the next para reads "However their problems wouldn’t end there, because if they were able to scrape together a 10% deposit, the mortgage payments on a lower quartile-priced home would chew up 42.6% of their take home pay, putting it squarely into unaffordable territory, even though interest rates are at record lows."

So it takes a not insignificant amount of time for a couple (single need not apply) to scratch together a measly 10% deposit on a house in the lower quartile in Akl? At which point they are totally at the mercy of the interest rate winds? That's before relatively ordinary life events like kids, loss of job etc... Who knows might get unlucky and prices are up another 300k in the interim. It used to just be AKL but now everywhere has seemingly gone the same way.

Although people have and will continue to make the jump the knife edge these people are forced to live on is getting ever finer, I just don't see any scenario in which this is a good thing long term...

[artemis]

....Although people have and will continue to make the jump the knife edge these people are forced to live on is getting ever finer, I just don't see any scenario in which this is a good thing long term...

First home buyers who save a deposit and take on a mortgage do usually set themselves up for a frugal few years, and are subject to unplanned life events over that time. But they have the opportunity to spend that time improving their skills and household income. Then even a couple of years in to paying down a mortgage there is starting to be light at the end of the tunnel and it quietly gets easier.

It depends for the most part on what their plan is and if they work that plan. Not everyone wants to hunker down for a few years to set up a stable home situation. If they have other priorities, fair enough.

[iamaskier]

First home buyers who save a deposit and take on a mortgage do usually set themselves up for a frugal few years, and are subject to unplanned life events over that time. But they have the opportunity to spend that time improving their skills and household income. Then even a couple of years in to paying down a mortgage there is starting to be light at the end of the tunnel and it quietly gets easier.

It depends for the most part on what their plan is and if they work that plan. Not everyone wants to hunker down for a few years to set up a stable home situation. If they have other priorities, fair enough.

I don't think that some sacrifice shouldn't be required, but the point (which is also made in the article that you posted) is that the situation has gone way way beyond simply "living frugal for a few years". And for what? So the previous lot can enjoy those crazy capital gains they're somehow entitled to? Lol.

[ynot]

I don't think that some sacrifice shouldn't be required, but the point (which is also made in the article that you posted) is that the situation has gone way way beyond simply "living frugal for a few years". And for what? So the previous lot can enjoy those crazy capital gains they're somehow entitled to? Lol.

Government owns this mess, "previous lot" didn't create this problem.

[iamaskier]

Government owns this mess, "previous lot" didn't create this problem.

Although you're quoting me, I'm taking this as a general comment as I never said they did?

[Zaphod]

The EITC in the US applies to INDIVIDUALS and not based on NZ's subsidy which is based on having children. Anotherwords, only families are eligible in NZ.

Formal advice to the government proposes that the scheme should be extended to those without children as well. A review of the scheme is imminent, so perhaps New Zealand will end up with a very similar scheme.