https://www.rnz.co.nz/news/business/509241/first-home-buyers-are-rich-people-economist
Housing is not something people on moderate incomes can afford, economist says, as new data shows affordability squeeze.
My parents bought their first house immediately after marriage -- they were about 22. Sure, they had a stool (I think it was just an apple crate actually) and a table in the living room, and not much else... but my Dad worked, and my Mom raised the kids as soon as they were born, quitting her job as a bank teller, so mostly single income. There was no generous dowry or gift from parents or relatives to purchase it.
This was in the late 1950s, mind you. But it shows how much buying power the middle class has truly lost since then.
There was a time when owning a home didn't require one to be 'rich'. Today's situation in supposedly 'rich' nations is a travesty.
I truly believe the cost of housing is a supply issue. The land my house is on is worth more than the house itself, and it's not even close. Something like 10:1 value of land to value of house.
And land has almost no intrinsic value. It's value comes from it's scarcity, and in NZ it's scarcity comes from zoning and housing limits, we have plenty of land.
The government used to build houses in huge numbers, across the country you can find whole suburbs of old state housing that was eventually sold off. I'd love to see us get in and do that again, which the previous government had started on to some extent, but the new government will not be interested in continuing it.
It is almost 100% a supply issue.
There are a lot of things that cause this issue, the crazy high cost of building, zoning and NIMBYism, the cultural insistence on single level homes with a yard....
I say this, when I live in Taupo and have a house with a yard.
A few years back, I lived in a small place that had a very small patch of grass somewhat less than 20m^2 (less than 5 x 4), I had an electric mower to keep it down...it was stupid, I had to store a mower for this tiny patch of grass.
I know someone who recently bought a new build with a triangle piece of grass about 1m wide and 2m long to the point of the triangle. Apparently the council required the developers to have some grass.
There are a lot of things that cause this issue, the crazy high cost of building, zoning and NIMBYism, the cultural insistence on single level homes with a yard…
I think the Kaianga Ora developments help with a lot of this. They are government so can fight councils and get laws changed if needed, and they are building medium density housing. From what I've seen, they are largely in areas with public transport access. And they don't have to care about whether the housing type is in demand, houses are houses.
Just a shame that the new govt has pledged to gut them.
Supply is only half the problem, the other half is the nearly bottomless pockets of the investor class that will always outbid everyone.
That's the beauty of it. You solve the supply problem, then investors don't have an investment anymore. What are they gonna do, rent it out? You solved the supply problem, so now there are more houses than people to put in them.
If you have more houses than people willing to rent them, then landlords have to compete for tenants, pushing rent prices down - or landlords just end up selling properties they can't rent, pushing house prices down.
If more houses are for sale, there are more choices for people buying houses. Instead of competing to buy a house, vendors will be competing to sell their house. If you can keep the supply of new houses coming, so you always have a surplus, then now you can't make heaps of money renting houses and you can make it on capital gains, how do you make money in property?
(The answer is you lobby the government to let in heaps of migrants to fill up the housing, returning to a supply problem).
Yep, let’s keep lowering the bar on “rich” so the actual rich can hide away while we start to attack our neighbours and friends who more than likely got a little lucky once.
I’m not saying FHBs are “poor”. Yes, they’re better off than most. But I don’t think lumping them in with the “rich” is fair. They’re not buying Maseratis, or building a property portfolio, or sitting pretty on 500k CEO salaries.
Mortgage repayments as a percentage of gross annual household income were at 49 percent in the fourth quarter of last year. Since the first quarter of 2022, this measure has been in a range of 49 percent to 52 percent.
That doesn't sound like rich people to me. It sounds like people desperately trying to escape renting, and own their own home.