KEY POINTS:
Here is an earlier selection of your stories:
Luke
One thing so called 'experts' tend to forget that my generation 20-35 year olds that 'want everything now' is we're also heavily debt ridden with student loans that previous governments enforcing upon us, when they have free educations. Also house prices are ten times the price they were of other generations compared to average wages. I think it's a bit rich for previous generations to lay claim that we want everything now and we need to sacrifice. The problems are not of our generation, simply look at the statistics, it's getting near impossible. The problem doesn't lie with us unable to sacrifice, the problem lies that people are unable to live.
PC
It's the old story of supply and demand.The Government continues to hinder supply whilst taxing everyone to death. Making it harder to build and harder for landlords does nothing to reduce rents and increase supply. Every time a new law/regulation goes through - prices rise.The easiest fix is to get rid of the bloated bureaucracy that is choking the supply side.
Kathy
We certainly couldn't afford to buy the kind of house we wanted when we got married 7 years ago. So we bought what we could afford, lived frugally for five years and then sold it and bought a better house in the area that we wanted to live. How could we afford to buy a house on a family income of less than $50k? Simple - no movies, no brunches, no coffees out, no holidays. We kept our old cars and were grateful for secondhand furniture. We ate simply and grew our own vegetables. Friends who were in a better financial position than us chose to spend their money on nice furniture, stereos, cars and other 'lifestyle' things. They are still renting and now complaining that they can't get into the housing market!
Kathy
There are steps to owning the home of your dreams and I think a lot of people want to skip those steps or unfortunately started to late.I just bought my first home, it is an apartment that needed serious work, I just finished and now when I sell it I will make around 30-50k on it and then I will buy the next one and hopefully fix it up, sell it for a little more and then keep moving up. The place I just bought is a tiny two bedroom apartment, my dream is to have a beautiful house on a section where I can't hear my neighbors, and I know if I keep buying in the price bracket I can afford and slowly move up with every buy / sell I will get there someday. A lot of people can afford homes, just not the ones they want.
We live in a land of instant gratification now, but it took me 8 months to find the place I bought and am expecting it to take around the same time to find the next one. Very few people can afford the house they want right now in the right area, but if you're willing to settle for less and slowly move towards your goal, you will eventually get there.
Terry
There are two main principles here people seem to be overlooking. The first is that housing is always a limited supply for areas people want to be. It's competitive and people here are very emotionally invested in owning their own homes. The second is that with a period of low interest rates people can acquire much more debt. So take half an average couple's income, figure out how much debt that will finance, and there's your average house price.
NeillR
Don't worry. If you look at the history of house prices, there has been a massive spike since the 70's - when Baby Boomers first entered the market. Before that, prices were stable for decades. The Boomers are about to enter retirement (from 2010) when the culture of ever-increasing house prices will abate, possibly at an extreme rate (if you believe current philosophy of houses being overpriced by about 40 per cent). To those who can't afford a house at the moment, I say bide your time, save your money and pick up a bargain as the Boomers shuffle off this mortal coil.
GD
I agree that we are very highly taxed. The tax bill monthly is the overwhelming reason why it is hard to save. Perhaps leave Auckland and move elsewhere. Earn less maybe, but need less money too and have a more enjoyable, slower pace life. Maybe. I am not convinced it is up the government to meddle, just let us have more of our money back!
James
Whats wrong with renting. Me and my partner rent in Wellington and recently tried to by the house we rent - however it would have cost us $13,200 more a year to own plus maintenance rates, insurance etc... We have now invested our deposit in other things such as shares, a small web business and a cheap rental property in Gore. We are a lot more comfortable than friends who earn more and have $400K mortgage. With a small child aswell we would really be struggling had we committed to purchasing our place. Whats the fixation of owning the house you live in?
G
Yes, some personal sacrifice is needed to buy a house. None of our parents bought houses and the then equalivalent of eating out, expensive coffee and flash cars etc. Everyone had to buy their first house in less than desirable places and fix the place up. And then just because you might earn more later, you don't have to move to a flashier house. As a book I read says "act your wage" - we all like to live above our incomes and spend more than we earn, but what we spend it on is not needed, just optional extras. Get good solid counsel and advice and make the sacrifices needed.
Susi Lay
My husband and I are in our late 20's. He works full time, I work and study part time. Our combined income is around $70,000 We have bought our first home 12 month ago. We liked the house - we don't like the suburb or the condition the house was in. So we have been renovating it bit by bit as we can afford. We sacrificed a lot to be able to own a home. We don't often go out for dinner or on holidays. But we had a goal: owning our own home. We saved very hard and eventually got there. What do people on a combined income of $100000 spend there money on? Cars, travel, food??? Stop and think about how much you could save each month if you'd cut back your spending. Also realize you can't live like that and expect to own a 3 bedroom house with garage on a full section in a "decent" suburb. If you want a house so badly - start at the bottom. This is how live works.
Moon
My world turned upside down - I separated, paid maintenance, rented a hovel, saved money for a deposit to buy a house as my ex spouse and children were entitled to have a roof over their heads as the kids were under 16. The home was in the Remuera traditional grammar zone. I bought in Clendon Park South Auckland - because that is what I could afford without paying a huge mortgage for the rest of my lifetime. It can done - I wasn't earning anything like what is being discussed. Of course, I also did not sit at cafes drinking coffee!!! It can be done -with prudence. Stop bleating.
Heather Roycroft
Something which we have lost sight of in recent years is that until relatively recently mankind (at least the middle and lower classes) did not spend their entire living wage on a home. Throughout history most of mankind lived in rented or disposable modest dwellings and time was spent providing food and clothing. Even the Romans lived in rented accommodation.This need New Zealanders have to own a home of more than modest proportions is not a natural way of life.
Duncan
I agree that anyone can buy a house if they really want to, houses have always been hard to buy. Stop buying usless stuff, save and buy in a non trendy area, do it up and move on. If you spend spend spend then don't cry when you can't buy a house. Mr Carter again has got it wrong, the problem is everyone wants to live in the Ponsonby's and Parnell's and believe it's a right to live there now.
C
I have to agree with R. If you do have an above average wage it IS possible to get into the housing market. I am a single young professional and bought my 3 bedroom house in 2006 on the Shore. I had saved a decent size deposit and am (to this date) paying my mortgage by myself. No flatmates. I pay 150 dollars a week more than I paid renting a one bedroom apartment (which is now renting for 60 dollars more than when I lived there). I work in the city, but don't pay for parking; I park on the outskirts, where it's free, and either walk or bike into work. This saves me 45 to 50 dollars on parking per week. I make my own lunch and dinner at home and take it to work. This saves me 30-60 dollars a week. These 'little' savings help my pay my mortgage. It's not always easy, but I really can't complain.
J
I am a property developer new to the career and recently took on a small project of subdividing property in Onehunga, Auckland. This was meant to be a simple property to subdivide, two lots would be created from one and the original state house would be done up and sold leaving the section. The resourse consent application took approx 70 business days to be processed and it seems that the reasons for the excessive delays were entirely due to the council not being interested in meeting the 20 day requirement.
The first time I called them to find out why the application was on hold I was informed that the person who processed the applications was on holiday and its was standard practice to just leave the applications on hold till that person got back 2-3 weeks later. There was apparently no one else trained to do this job. When I finally did get hold of this person, I was told I was 5th in the queue after the one he was working on at the moment (which was a 200 lot subdivision). The third time I called, I was 8th in the queue! Apparently some applications had come off hold and were slotted in according to application date.When I queried about the 20 working day requirement, he laughed and said that simply did not exist at the Auckland City Council.The reviewing by his boss and correction of typo's took 3 weeks.
Gerard
I hate to say it, but without a capital gains tax, property investment will remain appealing to "ma and pa" investors. There is little incentive for investing in other markets.
Johan Hattingh
The Goverment should make a section's available at a fair price ,only people that do not own property should qualify ,and they may not sell or rent the property for 5 years.It is wrong to advise that your pension should be invested in buying property. What happens if the property prices slow down when Goverment help the people of NZ. How can a section be more expensive than a house ? Do the Goverment take inflation of property prices and rent into consideration when the do there calculations for inflation .What persentage is it of your income ? It is cheaper to rent or buy in Aus and you can earn more ! I know why the property developers will cry if Goverment help there voters. Goverment must remember you can loose your tax base in this country if your people leave because it is easier to live in Aus ,now is the time to do the right thing.
Alan Wilkinson
The simple fact is that houses are expensive because the Government has made them expensive at the same time that it taks more tax out of people's incomes. It now costs more in delays, paper work, consultants reports and council fees to modify a house than it does to do the building work itself. And land development is strangled in red tape, rules, prohibitions and endless delays - all of which send the price of sections through the roof via increased costs and reduced options. Furthermore, speculators can be confident there is no end to bureaucratic and government stupidity and therefore all these costs will continue to increase and push up the "value" of land and buildings so property investment is risk free if you can raise the money. The final nail in the coffin of common sense is that the government can count on the votes of existing property owners into whose pockets ever increasing property values have flowed, environmental control-freaks who abhor progress and the envious who abhor wealth. Stupidity rules, OK?
Rob
1. We don't all earn 70k. 2. 70k a year means $4204 after tax. A 350K loan (25years, 8.75 per cent) = $3718 (principle + interest) per month = $485 a month cash to live on (food, clothing, transport). Hope he didn't want furniture, wife, kids, or holidays with that house. 3. If people have to choose between having kids, and not struggling to pay some basics or renting, they will rent.4. this is now. In another five years that 350k House will be worth 563K (@10 per cent increase per year), while his income will be 89K (5 per cent increase per year (yea right!)) leaving him $815 a month in the red. You own a house to live in. You should not live for your house. It shouldn't be that hard.
Karen q Temple
You would think the vice-president of the Property Investors Federation would a/ Be a little bit better at math and b/ Have a little more knowledge of the property market. 1/ Payments on a $350000 mortgage over 25 years at the Kiwibank current floating rate of 9.25 per cent is $2997 per month. 2/ Take home pay for someone earning $70000 with a student loan per month is $3775.3/ Leaving $778 per month or $180 per week to feed, clothe, transport, educate, provide health care etc etc etc for a family. As well as allowing for mortgage rates to increase. 4/ You would be very very lucky to find a decent property in the Auckland region for $350000 or under. A quick search on Trade Me reveals the following numbers of properties of 2 bedrooms or more listed at or under $350000 in the suburbs mentioned in the article:
Glenfield 1. Te Atatu 5. Panmure 0. The options are far greater in Pukekohe but if someone works in the city, the cost, environmental effect and time involved with travelling would be phenomenal! I know this is an overly simplistic calculation as doesn't take into account all properties on the market, tax differentials if the $70000 is the total being earned by a couple and potential Working For Families payments, and deposits saved or lent/pledged by family members, and various other variations. However the above does indicate it is not merely a case of going without luxuries to get into the housing market.
R
I'm gobsmacked that people here are claiming they earn 80K and 100K combined and that they are unable to afford a house in Auckland. My wife and I are paying off our first home, which we bought on a combined income of 90K less than 3 years ago. We had a sizeable deposit saved over 7 years by much sacrifice. We bought a modest home in Birkdale for 310K (90sqm on 970sqm). To those who fit in the above category: stop complaining. You're insulting those people who really do have it tough in this country. It may shock you to know this but you can't actually buy $5 coffees and YSL sunglasses if you want a home of your own. You have to set a goal, make sacrifices and work for it. Grow up.
JMS
I'm not an Aucklander, a Wellingtonian in fact, but not being able to get into the housing market is a similar problem. My personal solution is to head off overseas, in fact I have bought my tickets to do so. It shouldn't take me too long to get a 20 per cent deposit on a niceish place in the burbs, and I'll rent it out until it's paid off. Only then will I look at returning to NZ. I can't see any other option to get into the housing market other than buy in somewhere like Featherston on my modest income.
James M
We are a timid, law abiding conservative and very complacent by nature people and can only blame ourselves for the mess we have helped create re housing. Surely there being no controls on who buys or on the number of houses one can own, the climate has been created to enable, say, a multi billionaire from Timbuctu acquire as many "rentals" as he/she may desire. I personally know one European who resides in St. Tropez and lives from the income of more than 500 houses and apartments she owns here in NZ. In 1969 I bought 5 acres in the Coromandel for 1,000 hours work at the minimum wage. In 1989 it was worth 5,000 hours work and today is worth 40,000 hours work at the minimum wage. I fear for the future of my country. Surely there should be some sort of limit on who can buy properties and how many. Say only NZ residents/taxpayers and with a limit of say, two houses per person. Unless things change dramatically we will become a nation of renters.
Taxed to death
No one can afford to buy a house these days because its too expensive. My husband and I have tried for the last 5yrs and the fact that we are taxed too much we might as well stay living with my mum and there is already other family members living there because they to cannot afford to live elsewhere!
Kathy
I think for a first time home buyer, need to be think about starting small. From what I saw and heard, when people were talking about getting a house, they straight away talking about getting their dream home. Which to my book is just absurd. Coz if you think about it, when you are a first timer on a job market after graduation from uni, you cant expect to get vice president job (unless your father is very influential of course). The same principle should apply with buying a first home. My husband and I moved to Auckland 3 years ago, and quickly realise a dream home is just not possible. So we settled with a 2 bedroom unit on a block on 3 flats in a decent suburb. Thats what our money could buy, and thats what we bought. 3 years later, rather then moving up to a bigger house, we decided to invest on another 2 br flat on a block of 2 flats. Now we have a total mortgage as big as most of our friends has, but at least with us, we have somebody else paying half the mortgage. So my advice it to start small, especially if only for you and your partner. But even with family of small kids (probably 2 toddler max), 2 br flat, still better then renting.
Kris
Having bought a house 8 years ago and finding it to be classed as 'leaky' was enough of a shock. Having finally sold it at a reduced price to get rid of it (new owner fully aware of house status) leaving a small amount left over to go towards a deposit on a new house. Absolutely astounded at what the current housing prices are. My partner & I are on a combined income of $100k and would like to start a family however buying a house at over $320k on two incomes is a stretch but going down to one absolutely scares me. Renting is the solution at present for us but there are some sad excuses for good housing out there :-(
Raki Hutcheson
I totally emphasise with those in NZ trying get into the housing market especially in Auckland. There would have been no way I could afford a home living in NZ on a single income and no children. I can here in good 'ole OZ which is fantastic.
Raj Subramanian
I have a house, where I wanted to use the internal access garage as two bedrooms with toilet and bath.I approached City Council. Luckily they said it is possible. I heard that they turned down at least 20 proposals in my neighborhood out of 21. Still, I approached about 30 architects and only one said he would draw and it took about a year for him to come and draw as they are extremely busy.He charged me $2000 for the work. He submitted it to the Council with their fee of about $1000 and after 3 months I received a letter from them saying my plan is approved and I need to pay another $2000 towards their charges. Now I am ringing up several small builders and contractors for the job, they are all busy for the past 1 year. At last I caught hold of one small contractor, he supplied a quotation for $30,000 +.
I could procure the material for $3000 to 4000. Just because of the Council restrictions and inspections, the builder says he is asking for $30,000. In my house, for using my own garage in a different way why should i spend $35,000. If the council doesnt have long drawn procedures, I would have done it for $5,000 to 7,000 within 2 weeks. Now it is almost 2 1/2 years, still dont know what to do.
Ed
Maybe we can offer hope for some from our experiences. My partner and I, both 'second-timers' in middle age, believed we had been left behind in an escalating market until my parents, now in their 'seventies, decided that their quarter-acre property was becoming too much for them to maintain and began looking at moving into pensioner housing (reluctantly, as they built their house in 1959 and still love it). Literally killing two birds with one stone, we agreed to buy their house off them. We then borrowed the entire amount back off them for six months (interest-free), sub-divided the property and built a new house on the back of the section while they stayed in their home rent-free. The 'deposit' changed hands only on paper. After six months we repaid the loan by returning their home to them, and transferring the motgage to the new house. It was all done through solicitors. We are now here for them in their later years, and we each now have a home on a small section. We were lucky to have benevolent parents in a position to help us out, and I believe that a lot of young people are going to need assistance from family in future in order to become home-owners.
Ben
Rents are cheap, rent is a lot less than (in 99 per cent of the cases) the cost of ownership of the same property. So while you are renting you should be saving. But people are not, and this is evident in the fact that we have the highest level of consumer debt ever. So all you young professionals may have you plasma TV's, label polo shirts and $8 heinekins on the waterfront, but don't complain you don't have your house deposit too. Also for the first few years you might have to suck it in and buy in an up and coming suburb and share with others to pay the mortgage. Stop wasting your money on junk and expect to buy your own place in a nice suburb and have it to yourself.
Adrian
For half the cost of an entry level house in suburban Auckland we could buy a beautiful 13 metre cruising yacht and live aboard. So we did. We love the 'apartment' lifestyle, and feel it is vastly better than living in the kind of house we would otherwise have bought. Sure, there is no scope for capital gain, but for how long can the prices continue to increase? This way our savings are accumulating rapidly, with the Gulf as our playground to boot.
Milly
I am a single mum with two children working fulltime to support them and myself. I purchased a tired shack in Auckland with a big mortgage as properties I had rented were continually being sold from under me to the highest bidder. Desperate for some stability for the kids and I, I took the plunge. Now I worry how to pay the mortgage and still have enough for us to live on. I see others on the benefit that are better off than we are and when I work overtime and pick up any additional work elsewhere to make ends meet I am taxed at a 45 per cent tax rate. I'm sick to death of this government who tax the poor to give to others who are supposedly worse off than I am. It's thoroughly pathetic!
AJC
I'm 31 and my husband is 35. We live in Auckland and have a combined income of over $100,000. We face an extremely common (and difficult) choice that I have not yet seen mentioned by the media. We can either get a mortgage, or have a child. We cannot do both; it is an either-or. We're choosing to have a family; we're afraid this choice will mean that we'll never become home-owners. Who knows how expensive houses will be in five years' time? We are angry that the baby-boomer generation have forced us into this choice by pricing us out of the housing market with their greed for multiple rental properties -- I wonder how many grandchildren it's costing them?
Amanda
We moved to Gold Coast nearly 5 yrs ago. For the weather initially but as a reg. nurse when I arrived her my hourly rate was 10 bucks more than at public hos in Auckland. On a recent trip back we visited Auckland, Tauranga and Hamilton and were astounded at the prices in all three places but mostly in Auck. The wages have failed to increase enough for the average Joe to afford a first home and rent prices are ridiculous. Even if we wanted to come back to Auckland I am now telling people here, that we couldnt afford too! I would lose approx 800 dollars a fortnight in net income and the money we have made on houses bought here would be lost on a house half way decent in Auckland. Yes people in NZ should be moving to other areas of NZ to live, quality of life would no doubt be better and wages similar?. I dont think you can compare Sydney to Auck tho as wages are 10 fold and in proportion to the average professional income earner in Sydney. I also wouldnt suggest moving to Oz unless mindsets could be changed and you were prepared for a few knock backs as it aint all been a bed of roses here either but at the end of the day this place is glorious... tax man does well out of our family but he has also afforded us a house to keep us happy in for a better future.... and plenty of 'readys' to spend, on my days off. It is a shame that we kiwis have to leave our 'home land' to make something of ourselves and an even bigger shame that we want to stay away!
Catherine
While renting in Europe can be done for a lifetime, it is because the houses are owned by big huge rental companies, which are reigned in by tight government policies. Here in NZ the rental market is controlled by ma and pa investors who kick you out at a moments notice when they want to sell, move in or can get more money from someone else. Tauranga is also very pricey for anyone on a minimum wage. Oh to be a british immigrant who could sell up an unremarkable house in blighty and buy a semi mansion here. Unfortunately with a young family and low income I doubt our family will ever own a home.
Jp
It seems that the people with the ability to do something about this problem couldn't care less. They are most likely enjoying seeing their property portfolios increasing thousands of dollars a day at other people's expense. We are currently looking at moving overseas in order to earn a competitive wage and be able to afford a house. It will be a great disappointment to me if I am forced to do this in order to create a reasonable lifestyle for myself, and my family. I feel like we have been robbed of a future in NZ, and the ability to have a family in NZ.
Kiwi Teetee
I paid $70,000 in rent before I bought my first home. Now being debt/mortgage-free, I look on in amazement how all these people have been sucked in to buy bigger and better houses, and more and more in debt in the hope that they can sell down and get a cheaper place later on (read Pension Panic by Gareth Morgan and see if this is a good idea). None of these houses are real money you can use, only more equity to give up and get more in debt with. The sooner people realise this, the better. Which is better, a $700,000 home with a $200,000 mortgage and no cash or a $300,000 home and $200,000 in liquid assets (my position)?
Madeleine
I, too, scoff at the use of "lifestyle choice" to describe renting, and also at the suggestion that more rental properties are thus required. I rent precisely because I have no other choice. When I was job hunting, there were only 2 North Island jobs advertised, and one was here in Kerikeri, where I can't even afford to buy a patch of grass. While Gore and Invercargill may well be affordable, I have no desire to return to wearing polyprops year round.I would like to see a useful survey done (not internet poll), perhaps through the tenancy tribunal, to determine the reasons that people are renting. I don't merely want a house, I want a home.
Chontelle
At 30, I'd finally managed to buy a house in the Manawatu. 3 bedroom large section, nice new kitchen etc. I sold when I moved to Auckland (stupid) and ended up living in a one bedroom flat with tiny courtyard tiny lounge and terrible tiny kitchen, paying more per week for this little older rundown flat in a reasonable area, then I paid fortnightly on my mortgage for 3 bedroom house good section even possibility of subdivision. The payrise from Palmy to Akl did not compensate for the cost of living. Now my partner and I btwn us earn 150k and we have no ability to buy a house to cater for our family in AKL. and.. if we could I don't think we would. I balk at paying the prices being asked for houses of lesser quality then my old home, 3 - 4 times the amount? Get real Auckland. The houses just aren't worth that much money. Property developers must be bathing in gold and laughing at our stupidity. Now we deal with a landlord who lives in Japan, and didn't even see the prop when he bought through agent, came for a look after we pointed out he can't rent the granny flat separately using our power account and our water, which he didn't even know.
George Stead
It is so simple to cool the housing market, not by increasing rates but stop the supply of the amount people can borrow. If you had a static number of houses and home owners and you supply the mortgage market with 10 per cent more capital the house prices will go up by 10 per cent to absorb the extra supplied money. The solution: if you are a first time buyer you can borrow 100 per cent second time buyer say max 80 per cent third time say 70 per cent or if investment property or properties in trust and overseas owners 60 per cent. And how is this going to be regulated ..at present mortgages are registered against the properties ...the selling price and the amount of the mortgage should also be registered and this will be the total amount the banks can secure against this property. This will stop them lending . If you need money for your business and require your house as security against a loan this amount is already identified, as tax relief is available on the interest paid, so this would not be affected and could be an additional amount. The situation is mad at the moment you borrow as much as you can afford and as the offshore banks can charge twice as much interest in NZ as Europe they flood the market here , over heat the market , up go the rates and their profits . If the banks are oversupplying the market by 10 per cent the prices will go up by 10 per cent and if you can borrow at 7.5 per cent you must borrow and buy a house as you make 2.5 per cent profit on someone elses money . The solution to keep raising the interest rate just plays into the hands of the banks and makes it more attractive to lend even more money. It is so simple !
Lucy
In response to a comment made about buying a house down in Invercargill/Gore where its cheaper...yes it is and it is an option for some. But everything else is cheaper down here too. Salaries - major difference from up in Auckland and rent...you can rent an entire house in a good suburb for $200 a week. It's very cheap to rent but if you are the one renting it out - that wouldn't cover your mortgage - even if you were only buying the house for $200,000. So the problem could be seen as almost the opposite down there - a lack of rental properties! You can get into the market a lot easier than in Auckland but you will also sacrifice your salary, life-style, climate & opportunity to make money off a property (should you choose to leave/rent your house). It is a way of getting into the market though - and for some that's the chance they need.
John
As a born & bred Aucklander now living in Christchurch, I empathise completely. But as scary as it is for renters, friends of mine with $400,000 mortgages should be more worried. With more people leaving than arriving from other parts of the country, the real source of soaring house prices is foreign immigration. If that vanishes, we're looking at a housing crash of worse-than-80's proportions. I bought a house in Chch within 20 minutes walk of the city centre, in a quiet neighbourhood. $150k mortgage, with endless bars, restaurants and endless outdoor activities available that were denied in Auckland. Coupled with 40 per cent less rain and more sun (admittedly more extreme temperatures) and it's a winning move. I recommend it.
Grant White
Thoughts to ponder. Prices are determined by supply and demand. In Tauranga, where new housing and land for new housing is plentiful, the annualised house inflation is just 2.2 per cent. And this in the fastest growing city in NZ.