sen8or:

 

mattwnz:

 

In terms of the term millionaire, often we now often hear rich people referred to in the media  as multimillionaires. Rather than just a millionaire. 

 

A significant amount of wealth has been created out of thin air (and from money printing) as a direct result of Covid, due to the 30% + house price inflation. But the net effect is that the well off have gotten richer, and the poor (in particular non property owners) have stayed at similar levels, or gotten poorer, esp if their rent has gone up. So the wealth that was created from thin air was not distributed. The government now has to spend years redistributing that wealth properly with taxes etc to fix the problem. But people don't want their houses to be taxed, but that is difficult when the values have gone up so much , often completely tax free. One could argue it is in inflation hit.

 

 

 

 

If you were cashing out of the market, that would certainly be true, but for many who buy/sell in the same market, the increase is nullified as they simply have to pay more for whatever they are buying, nill net gain (or close enough if playing in the same sand pit) with only changes in circumstances impacting the gain/loss in true wealth (larger/smaller house, changing suburbs / cities etc).

 

On paper my house may have risen, but as I have no intention of selling it, its a moot point, no different than if the paper value of the property declined, until I exit the market completely, its "feel good" wealth only.

 

 

 

 

 

It all depends. Buying and selling in different areas could release a million dollars for some easily. Eg Selling in Auckland and buying down south somewhere. Likewise downsizing or moving from a house into an apartment. 

But the increase in equity over the last year or so is what has made many families in NZ  millionaires. Lets say someone had a house that was worth $800,000 in 2019, with $500,000 equity ($300,000 mortgage). Currently they maybe able to sell it for $1,300,000 in 2021, which wouldn't be unexpected in todays market. Especially as one bank has predicted house prices may rise another 15% in the next year .  That is an increase in equity of another $500,000, meaning they now have equity of a million dollars, largely thanks to Covid. They could then sell and buy down south and get a house for maybe $600,000 without a mortgage and still have $400,000 in cash. So they are essentially millionaires in assets and cash.