Can't Afford a House No Problem Good News!

Zardnaar

Deity
Joined
Nov 16, 2003
Messages
19,969
Location
Dunedin, New Zealand
I got a shock today when I checked my app on exchange rates.

The New Zealand dollar was worth more than the Australian dollar. And was up to 0.78 USD.

Then I saw this checking the news.

https://www.interest.co.nz/news/109...nd-becomes-first-developed-country-investment

First post Covid country to have our credit rating upgraded.

Mortgage got paid for this time last year. House went up 19% in value last year. It's fine.

Meanwhile my cousin had to move and her rent doubled. It's fine.

Cheap credit plus 100 000+ returnees and unofficial refugees via spouses has caused the average price to hit $800 000 ($600k+ USD). It's fine.

With increases of around $100k plus for a house to buy one just eat less avocado toast. It's fine.

Around 6 months ago the entire country only had 17 000 houses for sale. It's fine.

The government more or less guaranteed house prices won't drop with Covid relief package. It's fine.

Want to become a millionaire it's easy but a house. Government backed it's fine.

Your house earns more than you tax free. It's fine.

Want to go to Europe for free? Just borrow against your house it will pay for itself. It's fine.

And once the borders reopen no one will ever want to move here. Trump said it's a hell hole. It's fine.

We hate foreigners here.

It's fine.

Basically it's rapidly becoming the 19th century again. You either own property or you don't.

Rent $600-$750+ per week.

Owner. Double digits house price rises local rates around $40-$50 a week. Universal healthcare though and you can insure a family of 6 for $50 a month.
 
Elect a government that will build more houses and stop blaming refugees.
You are a rich country with a low population density.
You have the space and can afford to, the solution is in your own hands.

That's the problem.

Covid blew a big hole in the budget, Government was elected in 2017 to build more houses. Money was there.

Then reality promising thousands of houses is one thing then they discovered they couldn't deliver,
Quietly dropped it and ruled out tax increases "on her watch".

So money not there can't put up taxes except maybe post Covid to pay down debt.

Boomers vote guess who owns the houses. Most if the MPs in the government also have housing portfolios over 110/120 odd MPs.

64% if the country own houses and in effect they all got 100k+ tax free last year. We own our house but yeah doesn't make things easy.

Kia kaha NZ aroha get F'ed with a smile.
 
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Mortgage got paid for this time last year. House went up 19% in value last year. It's fine.

NZ isnt alone with these problems
Generally the is a problem with the way the system was set up, people wanted to own a dream home so they set up incentives for this to happen and the system benefits home owners while the next generation is paying for this
You could do what Germany has done with its controlled rental market, but there is a huge cultural barrier for us which values homeowner ship vs Germans cultural for building a nest egg for earily retirement.

Its natural for prices of property to increase as population and economic growth increases, but it shouldnt be so disadvantageous for the younger generation while the older generation reap all the benefit
 
That's the problem.

Covid blew a big hole in the budget, Government was elected in 2017 to build more houses. Money was there.

Then reality promising thousands of houses is one thing then they discovered they couldn't deliver,
Quietly dropped it and ruled out tax increases "on her watch".

So money not there can't put up taxes except maybe post Covid to pay down debt.

Boomers vote guess who owns the houses. Most if the MPs in the government also have housing portfolios over 110/120 odd MPs.

64% if the country own houses and in effect they all got 100k+ tax free last year. We own our house but yeah doesn't make things easy.

Kia kaha NZ aroha get F'ed with a smile.

Government can borrow cheaper than private individuals so they can borrow, build, keep some houses as low income rental and sell the rest as affordable housing.
Given the inevitable post-covid recession the work would be good for the economy too.
 
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