Real estate, post COVID-19 level 4 (since 2020)

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#2759785 13-Aug-2021 19:21

Yes, and let's not forget this low wage vs high property prices phenomenon is actually not uncommon globally. You look at places like Beijing. Wages are low, but a small tiny apartment is going to cost you 10 million NZD.

In NYC, an inner city apartment can cost the same s Beijing, if not more, yet American wages on a broad level are low.

Sadly this is the world we live in - the rich get richer and the poor get poorer. It's not good, but my point is this is not just a New Zealand phenomenon.

Those who can't afford to buy will end up renting, or be living in a smaller apartment or unit. This is the sad reality.

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#2759787 13-Aug-2021 19:26

heavenlywild:

Yes, and let's not forget this low wage vs high property prices phenomenon is actually not uncommon globally. You look at places like Beijing. Wages are low, but a small tiny apartment is going to cost you 10 million NZD.

In NYC, an inner city apartment can cost the same s Beijing, if not more, yet American wages on a broad level are low.

Sadly this is the world we live in - the rich get richer and the poor get poorer. It's not good, but my point is this is not just a New Zealand phenomenon.

Those who can't afford to buy will end up renting, or be living in a smaller apartment or unit. This is the sad reality.

You're comparing apples and oranges.

Both scenarios are caused by supply constraints but the Beijing example is a physical supply constraint from extremely high population.

The NZ example has very different causes and can be changed.

heavenlywild

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#2759789 13-Aug-2021 19:37

It can't that easily because often people of any authority will always seek to protect their wealth.

The majority of home owners are never going to accept selling their house for "a fair price so FHB can afford it".

Home owners will use their voting powers to ensure the favourable policies protect them from any falls.

In this instance, it's due to covid but mainly down to Labour's incompetence.

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#2759791 13-Aug-2021 19:39

heavenlywild: It can't that easily because often people of any authority will always seek to protect their wealth.

The majority of home owners are never going to accept selling their house for "a fair price so FHB can afford it".

Home owners will use their voting powers to ensure the favourable policies protect them from any falls.

In this instance, it's due to covid but mainly down to Labour's incompetence.

Not really. Supply constraints are an issue 20+ years in the making.

heavenlywild

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#2759805 13-Aug-2021 20:09

The problem is supply is being snapped up by investors so no amount of houses will be enough until people's love affair with property ends.

mattwnz

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#2759829 13-Aug-2021 21:42

heavenlywild:
Yes, and let's not forget this low wage vs high property prices phenomenon is actually not uncommon globally. You look at places like Beijing. Wages are low, but a small tiny apartment is going to cost you 10 million NZD.

In NYC, an inner city apartment can cost the same s Beijing, if not more, yet American wages on a broad level are low.

Sadly this is the world we live in - the rich get richer and the poor get poorer. It's not good, but my point is this is not just a New Zealand phenomenon.

Those who can't afford to buy will end up renting, or be living in a smaller apartment or unit. This is the sad reality.

Although those areas are an extreme. Much of the US, house prices are significantly cheaper than NZ. Look at suburbs in Texas for example. But the US has also had investors buying up houses post covid including hedge funds causing an increase in prices, but not as extreme as NZ. In the UK banks are buying up houses and becoming landlords. Hope we don't see that sort of thing happening here. I would say that most renters would prefer to own if they could. So I get annoyed when I hear some landlords say that they are helping the country by buying a house and renting it out, when it is likely they may have outbid a first home buyer in order to buy it. They are usually doing it for financial reasons. When a renter FHBer could have purchased that house. I would feel better if the landlord had built the house and then rented it out because then they are providing an extra house. The government also wants landlords to do this and not buy existing houses, based on policy changes.

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#2759971 14-Aug-2021 13:23

Those are extreme examples, and you’re dreaming if you think any of NZ’s cities can be fairly compared to world cities like New York or Hong Kong or Beijing or London. The scale is totally different, the circumstances are different and the lifestyle is totally different.

heavenlywild

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#2759992 14-Aug-2021 14:04

My point is inequality will keep increasing.

Not being able to buy a house will become more normalised, sadly.

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#2760071 14-Aug-2021 18:20

https://www.newshub.co.nz/home/new-zealand/2021/08/can-labour-tackle-the-housing-crisis-like-its-lauded-party-predecessors.html

Can they really do it again, like they did before?

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#2760072 14-Aug-2021 18:22

quickymart:
https://www.newshub.co.nz/home/new-zealand/2021/08/can-labour-tackle-the-housing-crisis-like-its-lauded-party-predecessors.html

Can they really do it again, like they did before?

Could they? It's unlikely.

Will they? No. The government has made it very clear they don't want housing prices to drop.

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#2760103 14-Aug-2021 22:17

heavenlywild: My point is inequality will keep increasing.

Not being able to buy a house will become more normalised, sadly.

It has always been normal. That is why rental properties have existed for a thousand years in one form or another. Inequality has also always existed and it always will. Some people are better at life than others.

Many people in continental Europe never buy houses of their own for what are probably cultural reasons and many buildings in cities like London, NYC etc are owned by foreign interests and the living space leased to the occupants on longer leases than are usual in NZ.

Until some government in NZ realises that at least part of the answer is offering Kiwis other tax efficient ways to save for later life, not much will change. The answer in this case is not "more tax" but "less tax".

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mattwnz

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#2760107 14-Aug-2021 22:55

But it is getting worse in NZ. I don’t think there are any recent stats but rentals have increased from 25%of the housing stock in the 90s, up to 33%. This is massive and I suspect that % is even higher now.

We are essentially moving to a subscription model for housing, and the market will likely be professionalise as houses have to meet higher and higher standards

One of the main reasons many younger people want to stay in NZ is the kiwi dream of a home. If that is unattainable, which it could now be for many, then we likely have another brain drain on our hands. We already have this occurring in Wellington with health professionals leaving due to high rents and living costs

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#2760108 14-Aug-2021 23:01

Handle9:
quickymart:
https://www.newshub.co.nz/home/new-zealand/2021/08/can-labour-tackle-the-housing-crisis-like-its-lauded-party-predecessors.html

Can they really do it again, like they did before?

Could they? It's unlikely.

Will they? No. The government has made it very clear they don't want housing prices to drop.

People are getting fed up. They lost 10 % in the last poll. A government needs to make some tough moves.

heavenlywild

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#2760110 14-Aug-2021 23:12

I agree people are fed up but I believe they are in the minority.

Despite home ownership declining over the years, the majority are still loving the capital gains (albeit quietly) so to do anything drastic would be political suicide.

This is why I reckon no government is ready to take such steps.

quickymart

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#2760111 14-Aug-2021 23:38

But I've seen stories of even homeowners themselves saying the price are rising too much and they don't think it's fair either, so even some of them aren't happy about it.

Prices have dropped a lot before, but the situation was very different back then (no coronavirus!)

https://www.greaterauckland.org.nz/2016/07/11/remember-the-last-time-house-prices-crashed-40/

^ (even this article pre-dates coronavirus, would be interesting to see an updated version.)

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