Geektastic:

 

Prices are certainly at a point where they require a mental reset. We were thinking of buying another house to allow us to have a city side bolt hole and a shorter commute a few times a week. Even in the Hutt you're approaching $850k for something in a nice part like Trentham.

 

 

 

When we arrived 15 years ago or so, that would certainly have bought 2 houses there I am sure. 

 

 

 

However, if you graph property prices over time in any Western economy, the only direction they go is up. You can increase supply to reduce the speed of increase. You can increase interest rates to slow the market. Nothing short of a resurgence of the Black Death wiping out 50% of the population again resulting in empty houses (whole villages simply disappeared in Britain - their names remain in records but there is nothing there but open fields now) would cause a significant long term downward trend I suspect.

 

That is almost getting into Wellington suburb prices. The motorway travel times during peak time are not good, and the trains are quite slow between Hutt. These prices have cause the ripple effect into the Wairarapa, as Wellington people find more value in the Wairarapa pushing up prices. So locals have to compete with these people, who are often buying them as weekenders and some for land-banking, so empty most of the time. You would be lucky to buy a nice house in Martinbourough  or Greytown at those prices. A million seems to be about the norm. I know someone from Wellington who have just purchased a house in the Wairarapa for it's future subdivision potential and is land-banking and using it as a weekender. No point in renting it out due to the hassle.

Increasing interest rates theoretically should either stall house prices, or decrease them. But I can see banks introducing longer terms, such as 40 year mortgages to allow people to borrow more.