NZ 1st homebuyers are ScReWeD...

[NeverQuestion]

I've said it before, but about 40% of people who's name is on a deed of title, have their name on more than 1 title. Source: Land Information NZ's database. I work in an industry with access to the figures

When housing is the main investment in this country it is not hard to see why... Given the massive returns in the last few years you would be hard pressed to find a better investment.

The problem is that you now have a generation forced to borrow for higher education and facing the fallout of the GFC which has meant that high paying jobs and wage increases each year are no longer a thing.

I'm 29 and have seen only 3 wage increases in the last 7 years.. I work long hours and have clocked over 40 hours overtime this month alone!

But because of my Student loan the government takes a considerable percentage of my overtime and regular pay that never arrives in my bank account...

On top of that If I try to take a weeks pay in the hand then again a considerable percentage of that is immediately taken for my Student loan.

Easy to dismiss this with the "I remember the mortgage on my first house ..." .. How about start with 40K in debt and a housing market that forces you to pay $550,000 for your first house

Now start on 40K a year and have no support from your parents who also rent and struggling to make ends meet..

On top of that now throw in the huge threat of Interest rate hikes on a $550,000 mortgage you paid for a house falling apart.

This is what screwed means for the current generation (I'm not asking for a handout just a chance in my own country to own a home) .

"Oh but it has always been hard" whatever, go back 4 years and your see places in Auckland for 350 K.

No one cares about our generation and it will come back to bite them when we find our voice....

[JBmurc]

When housing is the main investment in this country it is not hard to see why... Given the massive returns in the last few years you would be hard pressed to find a better investment.

The problem is that you now have a generation forced to borrow for higher education and facing the fallout of the GFC which has meant that high paying jobs and wage increases each year are no longer a thing.

I'm 29 and have seen only 3 wage increases in the last 7 years.. I work long hours and have clocked over 40 hours overtime this month alone!

But because of my Student loan the government takes a considerable percentage of my overtime and regular pay that never arrives in my bank account...

On top of that If I try to take a weeks pay in the hand then again a considerable percentage of that is immediately taken for my Student loan.

Easy to dismiss this with the "I remember the mortgage on my first house ..." .. How about start with 40K in debt and a housing market that forces you to pay $550,000 for your first house

Now start on 40K a year and have no support from your parents who also rent and struggling to make ends meet..

On top of that now throw in the huge threat of Interest rate hikes on a $550,000 mortgage you paid for a house falling apart.

This is what screwed means for the current generation (I'm not asking for a handout just a chance in my own country to own a home) .

"Oh but it has always been hard" whatever, go back 4 years and your see places in Auckland for 350 K.

No one cares about our generation and it will come back to bite them when we find our voice....

I Agree ...at 38 I've been lucky enough to have been able to buy property much cheaper when I was in my early 20's as I never got a Uni loan as I left school at 17 and started full time employment ....IMHO gave me a great headstart on mates that spent many years at Uni to come away with huge debts (my wife still has a small amount to go).... still I don't have the Qualifications so moving away from my hard labour job as I get older isn't going be as easy to get a good paying white collar job >>>

You can really see the divide going to spread from the richer families to the average-lower incomes struggling ...as large inheritances pass downwards to smaller families(than the past) .... I know of many very wealthy families with just one kid ....!!!

[jr1973]

I feel for you. Move to Australia and skip the debt maybe? Tertiary education has become largely a joke in terms of cost for benefit. Australian Uni's are in a real mess with its asian oriented degree factories. If they were not tax payer funded profit oriented I wouldn't have an issue. For my 2 pennies worth... find some way to create value that you enjoy and charge a reasonable amount for it. People will always pay for value.

[SBQ]

I feel for you. Move to Australia and skip the debt maybe? Tertiary education has become largely a joke in terms of cost for benefit. Australian Uni's are in a real mess with its asian oriented degree factories. If they were not tax payer funded profit oriented I wouldn't have an issue. For my 2 pennies worth... find some way to create value that you enjoy and charge a reasonable amount for it. People will always pay for value.

What makes a country great is by it's reputation and I applaud the people of NZ for not having this culture of 'skipping to another country to evade debt'. Unfortunately, my elders have told me the Aussies have conned and ripped NZ off far too many times.

As for the pay for value ; I do believe NZ will still buy Made in China.

If you asked me about going to Uni in the 1990s, I would say it had a clear advantage. Nowadays, the price of tuition has skyrocketed and students going into massive debt ; earning a degree for most part, has no real application or relevancy to the NZ economy (obtaining a job in that field of study). How does this make sense? Are the Asian families wrong for wanting to send their students to earn their degrees as it seems there's no shortage of that trend changing, despite their job outcome is a lot less today than it was 20 or 30 years ago.

I'm often confused on the over-emphasis of education in NZ. I know people paying $26K a year for their CHILD going to some ritzy private primary school, while the NZ gov't pours huge amounts of $ into the public schools. What value am I missing here? Add up the cost from pre-school -> finishing university and you could end up owning a house (not an Auckland house but if the same sums were invested wisely over the same period, enough for the mean average cost of a house in NZ). Just another way how the rich are creating a divide in society (old boys club).

[NeverQuestion]

So here is where this gets Scary...

• Who has the most to loose during a property downturn?

Those with low equity.

• Who would that most likely impact?

First Home Buyers

• How many will be hit?

Those who bought in the last 3 years... Maybe more


There is no escaping the mess that is the Property Market.. This has been let to run for too long... I really do think that Central Banks have realized this mistake.. Hence the desire for QE... Next stop?! Hyperinflation.. Only way to get out of this now..

[SBQ]

So here is where this gets Scary...

• Who has the most to loose during a property downturn?

Those with low equity.

• Who would that most likely impact?

First Home Buyers

• How many will be hit?

Those who bought in the last 3 years... Maybe more


There is no escaping the mess that is the Property Market.. This has been let to run for too long... I really do think that Central Banks have realized this mistake.. Hence the desire for QE... Next stop?! Hyperinflation.. Only way to get out of this now..

All those 3 points are irrelevant as long as the person can make the mortgage payment. Don't forget, mortgage rates are at record lows meaning it's never been cheaper for a 1st time owner to buy. The banks are literally screaming for people to take their money, for just as long as they have a paying job.

What mistake are you implying that the central banks have done? Oh you mean they should do nothing and let the ship sink?

Please show me data that we are heading for 'hyperinflation' - i'm sick of this claim with unfounded evidence. The QE during the 2008 GFC had resulted in no negligible rise in inflation whatsoever! The amount of deflation from COVID would of amounted to record levels never seen before if the central banks did nothing. Back in April we saw the oil price collapse - is that not deflation? It would be if the gov'ts and central banks did nothing; making it a permanent state.

One thing certain, if the asset prices of houses collapse, so will the banks fall ; meaning, central banks can not afford to let that happen. Likewise with the stock market.

[stoploss]

All those 3 points are irrelevant as long as the person can make the mortgage payment. Don't forget, mortgage rates are at record lows meaning it's never been cheaper for a 1st time owner to buy. The banks are literally screaming for people to take their money, for just as long as they have a paying job.

What mistake are you implying that the central banks have done? Oh you mean they should do nothing and let the ship sink?

Please show me data that we are heading for 'hyperinflation' - i'm sick of this claim with unfounded evidence. The QE during the 2008 GFC had resulted in no negligible rise in inflation whatsoever! The amount of deflation from COVID would of amounted to record levels never seen before if the central banks did nothing. Back in April we saw the oil price collapse - is that not deflation? It would be if the gov'ts and central banks did nothing; making it a permanent state.

One thing certain, if the asset prices of houses collapse, so will the banks fall ; meaning, central banks can not afford to let that happen. Likewise with the stock market.

SBQ , It is not true that the banks are screaming for people to take their money .It might never have been cheaper interest rate wise for a 1 st home buyer , but currently with servicing requirements it's not easy . The banks have tightened up servicing requirements dramatically . Very little lending under 20 % LVR.......
Current numbers and the wage subsidy is still going ... ( note Australia has extended mortgage deferrals )
66870 customers on reduced payments , ( Min or interest only) $ 21 Bio of lending , 55406 customers on deferred mortgage $ 19.5 Bio lending ouch ....
https://www.stuff.co.nz/business/mon...liday-lifeline

[SBQ]

SBQ , It is not true that the banks are screaming for people to take their money .It might never have been cheaper interest rate wise for a 1 st home buyer , but currently with servicing requirements it's not easy . The banks have tightened up servicing requirements dramatically . Very little lending under 20 % LVR.......
Current numbers and the wage subsidy is still going ... ( note Australia has extended mortgage deferrals )
66870 customers on reduced payments , ( Min or interest only) $ 21 Bio of lending , 55406 customers on deferred mortgage $ 19.5 Bio lending ouch ....
https://www.stuff.co.nz/business/mon...liday-lifeline

Notwithstanding the LVR ratio, show me another time in the past where banks were more eager at lending? The banks are in the business at lending and the reason for their screaming? I agree the COVID situation has put many out of work - but that's a different story to those looking for their 1st home. As far as i'm concerned, if you can prove you have steady income, stable job in these tough times, and have the 20% down payment deposit ; I can't see why a bank won't say 'yes' ?

Again, banks make no money when they can't lend and they stand to lose a lot when the market collapses with record foreclosures. This means, the lending by banks needs to ease up even more.