Real estate, post level 4

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#2870961 18-Feb-2022 16:16

engedib:
quickymart:

And as per Newshub this morning:

https://www.newshub.co.nz/home/money/2022/02/housing-affordability-in-new-zealand-plummets-to-all-time-low.html

8.8. Jesus. I remember hearing people complain when 4X was considered "too much". They'd probably be beside themselves now.

It's household gross income, so it's even worse.

I think another bit issue is that the tax brackets have not been adjusted since 2010:

https://www.stuff.co.nz/business/money/300519291/minimum-wage-workers-pushed-near-middle-tax-bracket

So even at the minimal wage people are not really encouraged to do more because all of the extra income will be taxed at 30% + the new unemployment levy.

Do you turn down salary increases because “you are not really encouraged to do more?”

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You will find anything you want at MightyApe (affiliate link).

quickymart

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#2871498 20-Feb-2022 08:09

Now this strikes me as a bit of a housing "success story". If we could replicate this across the country (apartments for sale, not rental - at this price), that would be really good - and that build time is pretty impressive too.

https://www.stuff.co.nz/business/127800528/simplicity-kiwisaver-to-build-10000-affordable-longterm-rentals-in-the-next-10-years-for-450k-each

tdgeek

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#2871515 20-Feb-2022 09:45

quickymart:

Now this strikes me as a bit of a housing "success story". If we could replicate this across the country (apartments for sale, not rental - at this price), that would be really good - and that build time is pretty impressive too.

https://www.stuff.co.nz/business/127800528/simplicity-kiwisaver-to-build-10000-affordable-longterm-rentals-in-the-next-10-years-for-450k-each

Not bad. If housing is too expensive then set up a mass rental economy? If they were for sale, what would the price be? $550,000?

quickymart

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#2871518 20-Feb-2022 10:01

Even that price is better than the ridiculous $1m+ asking price in most places - and the houses simply aren't worth it.

tdgeek

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#2871618 20-Feb-2022 12:55

How is the average house price calculated? What if overall, prices are rising but th sales of lower priced houses skewed the average?

Handle9

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#2871664 20-Feb-2022 15:03

Median

kingdragonfly

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#2871671 20-Feb-2022 15:49

Both salaries and houses are traditionally calculated at medians.

So you can google "median auckland" and you'll get both.

"Mean" and "average" are exactly the same thing. Sometimes salaries are calculated as "means"

Infometrics has a handy "mean household salary" by New Zealand area web page.

Affordable mortgages and rents are often said to be 30% at most.

Here's a handy rent / mortgage calculator.

If you take your yearly salary (before taxes) and divide by 173 you should get the most you should be spending on your mortgage / rent.

41,600 --- 240 --- minimum wage one person
45,000 --- 260
50,000 --- 289
55,000 --- 318
60,000 --- 347
65,000 --- 376
70,000 --- 405
75,000 --- 434
80,000 --- 462
85,000 --- 491
90,000 --- 520
95,000 --- 549
100,000 --- 578
105,000 --- 607
110,000 --- 636
115,000 --- 665
120,000 --- 694
125,000 --- 723
130,000 --- 751
135,000 --- 780
140,000 --- 809
140,500 --- 812 --- Auckland median household income (more than one person in average household)

antonknee

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#2871713 20-Feb-2022 18:54

kingdragonfly:

If you take your yearly salary (before taxes) and divide by 173 you should get the most you should be spending on your mortgage / rent.

First of all, great informative post.

Second of all, wow - really? I just did this on my income and it actually came out much higher than I thought it would. It came out much higher than my mortgage payment is, but I already feel uncomfortable with my mortgage vs income so I can't even imagine.

Out of interest is that amount supposed to include outgoings like rates and insurance do you think, or are those an additional cost? My guess is they're additional seeing as renters wouldn't have them so the income/173 must just be raw house cost...

antonknee

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#2871714 20-Feb-2022 18:58

quickymart:

Now this strikes me as a bit of a housing "success story". If we could replicate this across the country (apartments for sale, not rental - at this price), that would be really good - and that build time is pretty impressive too.

https://www.stuff.co.nz/business/127800528/simplicity-kiwisaver-to-build-10000-affordable-longterm-rentals-in-the-next-10-years-for-450k-each

This is absolutely a success story. I live in one of NZ Living's earlier apartment developments, and they really are very good - and to be honest they've made some needed design changes in their newer builds that would make the newer ones even better.

I do think it's a shame these will no longer be available for sale, as I assume this means NZ Living will no longer develop themselves. Also, NZ Living were a key developer with Kiwibuild so I assume this is now done and dusted?

Divhon88

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#2871722 20-Feb-2022 20:00

antonknee:

quickymart:

Now this strikes me as a bit of a housing "success story". If we could replicate this across the country (apartments for sale, not rental - at this price), that would be really good - and that build time is pretty impressive too.

https://www.stuff.co.nz/business/127800528/simplicity-kiwisaver-to-build-10000-affordable-longterm-rentals-in-the-next-10-years-for-450k-each

This is absolutely a success story. I live in one of NZ Living's earlier apartment developments, and they really are very good - and to be honest they've made some needed design changes in their newer builds that would make the newer ones even better.

I do think it's a shame these will no longer be available for sale, as I assume this means NZ Living will no longer develop themselves. Also, NZ Living were a key developer with Kiwibuild so I assume this is now done and dusted?

“They are some of the greatest philanthropists of New Zealand that you would never know,” Stubbs said.

Mr and Mrs Brealey should awarded to be a Knight and a Dame.

kingdragonfly

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#2871727 20-Feb-2022 20:21

antonknee:I just did this on my income and it actually came out much higher than I thought it would. It came out much higher than my mortgage payment is, but I already feel uncomfortable with my mortgage vs income so I can't even imagine.

Out of interest is that amount supposed to include outgoings like rates and insurance do you think, or are those an additional cost? My guess is they're additional seeing as renters wouldn't have them so the income/173 must just be raw house cost..

The 30% maximum rent / mortgage figure has been used worldwide for quite a long time. I've heard the same figure used from Hong Kong to Boise Idaho. (Demographics is my hobby)

If you're doing less than 30% of your salary towards rent / mortgage, then you're probably doing OK.

It is the pre-tax figure (called gross pay).Since it's a rule of thumb, it usually doesn't include rates / insurance.

I tend think more than 30% is acceptable, if you don't own a car, don't park, and use public transportation from a reasonable distance, and aren't paying off another large debt.

insane

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#2871733 20-Feb-2022 21:12

kingdragonfly:
antonknee:I just did this on my income and it actually came out much higher than I thought it would. It came out much higher than my mortgage payment is, but I already feel uncomfortable with my mortgage vs income so I can't even imagine.

Out of interest is that amount supposed to include outgoings like rates and insurance do you think, or are those an additional cost? My guess is they're additional seeing as renters wouldn't have them so the income/173 must just be raw house cost..

The 30% maximum rent / mortgage figure has been used worldwide for quite a long time. I've heard the same figure used from Hong Kong to Boise Idaho. (Demographics is my hobby)

If you're doing less than 30% of your salary towards rent / mortgage, then you're probably doing OK.

It is the pre-tax figure (called gross pay).Since it's a rule of thumb, it usually doesn't include rates / insurance.

I tend think more than 30% is acceptable, if you don't own a car, don't park, and use public transportation from a reasonable distance, and aren't paying off another large debt.

It's a bit more complex than just a percentage as it's really to do with disposal income and your ability to make use of what you have left for living, investing etc, and not just surviving - but as a general rule it feels about right.

When my wife took a couple years off work we went up to just under 50% and with modest spending habits we had to watch what we spent and hardly saved anything over that period. Back at under 20% now and we're feeling very relaxed and able to save and invest etc again.

Financial stress is quite horrible.. And it doesn't take much to push things over the edge. Medical emergency, unexpected redundancy, unplanned house expense and you're dipping into your savings and going backwards.

quickymart

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#2871738 20-Feb-2022 21:49

Is the amount after dividing per week or per fortnight? I get paid every fortnight and if that should be my mortgage payment, it might be a little tough for me to find a bank who would loan that much (or little).

Handle9

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#2871740 20-Feb-2022 21:55

quickymart:
Is the amount after dividing per week or per fortnight? I get paid every fortnight and if that should be my mortgage payment, it might be a little tough for me to find a bank who would loan that much (or little).

The frequency doesn’t matter. It’s a percentage of income. Banks will let you make repayments on whatever cadence you want - weekly, fortnightly or monthly. Weekly has some advantages but it’s marginal.

quickymart

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#2871746 20-Feb-2022 22:22

I wasn't asking that, I was asking if the second figure is for a week or for a fortnight. I'm aware banks will let you pay back when you like, just so long as they get their money.

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