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  Reply # 1620792 1-Sep-2016 11:29
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Fred99:

 

Sam91:

 

Fred99:

 

From OECD.  NZ is leading the world at something, apparently:

 

 



I'm far from an expert, but isn't that graph is misleading? Shouldn't it start at zero?

 

 

 

 

 No.  The dotted line in the middle at 100 is baseline based on 2010 data, so NZ has become about 30% less affordable (based on household income to house price ratio), Spain about 25% more affordable.

 

 

 

 

Then the graph is in fact misleading.

 

a) It's not a graph of "House Price to Income Ratio", but a graph of the Change in House Price to Income Ratio since 2010. It may be that, although Spain's houses are still relatively more expensive than NZ's, they were even more expensive in 2010.

 

b) The bars below 100 (Portugal - Spain) should descend from the 100 line, not ascend from the X axis.

 

 


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  Reply # 1620812 1-Sep-2016 12:10
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The graph would have been simpler as % +/- change from a central x-axis (which intercepts y axis at 0).

 

And without the blue house arrow things in the background. 

 

If I'm interpreting that cluttered nightmare of a graph correctly NZ would be +30%, Spain would be about -25%. 

 

You would then see at glance which direction each country has trended in.

 

 

 

 





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  Reply # 1620838 1-Sep-2016 12:47
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The data for the graph was from the OECD.  The graph is from the IMF.  I don't think it's "misleading" - it presents what it claims in a reasonable way - but I agree that the figures below base index of 100 should descend from the centreline, not ascend from the bottom.  

 

Beyond simple charts like that, you're on a hiding to nowhere on subjects like this.  You could pull any stats you like to "prove a point".

 

Other criticism of that chart - it is supposed to show housing "affordability" should be disclosing whether incentives/subsidies may be available, what "income" means (gross, net "disposable" whatever), what constitutes a "home" or "house" - be it a tin shack with views of an olympic stadium or should have running water, electricity, and fewer than x people per room of x dimensions.  That may be in the original OECD data - I can't be bothered checking.

 

In the end and in my opinion, a significant indicator of reducing home affordability is reducing home ownership rates in NZ.  Yes - there's a counter argument or two about that (perhaps more people prefer to rent for one reason or another), but in my opinion there are good reasons to own a home, the stability it provides (not having to shift house continually), the "compulsory saving" effect - particularity when it comes to eventual retirement income/expenditure, reduced government expenditure on accommodation supplements, availability of affordable finance to homeowners with equity, pride and hopefully willing investment in maintaining existing housing stock, and reducing incentive for those with money to invest in housing as an easy way to make money.


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  Reply # 1620910 1-Sep-2016 15:20
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Fred99:

 

The data for the graph was from the OECD.  The graph is from the IMF.  I don't think it's "misleading" - it presents what it claims in a reasonable way - but I agree that the figures below base index of 100 should descend from the centreline, not ascend from the bottom.  

 

Beyond simple charts like that, you're on a hiding to nowhere on subjects like this.  You could pull any stats you like to "prove a point".

 

Other criticism of that chart - it is supposed to show housing "affordability" should be disclosing whether incentives/subsidies may be available, what "income" means (gross, net "disposable" whatever), what constitutes a "home" or "house" - be it a tin shack with views of an olympic stadium or should have running water, electricity, and fewer than x people per room of x dimensions.  That may be in the original OECD data - I can't be bothered checking.

 

In the end and in my opinion, a significant indicator of reducing home affordability is reducing home ownership rates in NZ.  Yes - there's a counter argument or two about that (perhaps more people prefer to rent for one reason or another), but in my opinion there are good reasons to own a home, the stability it provides (not having to shift house continually), the "compulsory saving" effect - particularity when it comes to eventual retirement income/expenditure, reduced government expenditure on accommodation supplements, availability of affordable finance to homeowners with equity, pride and hopefully willing investment in maintaining existing housing stock, and reducing incentive for those with money to invest in housing as an easy way to make money.

 

 

 

 

I think it should be based on house price and wages, and the ratio of that, and not based on 'affordability'. At the moment we are at a ratio of 10, when we should be at 4. You can easily make houses more affordable by allowing people to borrow more easily. Infact National government will say that houses now are more affordable than they have ever been, and they are probably right. But that is solely due to the low interest rates, which means people can afford to borrow more.. But once the interest rates go up to normal levels, say 8-9%, a lot of people will be very stressed to make those payments. At the moment if you buy an average shack in Auckland for 1 million, over the life of the loan, you are basically paying 2 million.


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  Reply # 1620946 1-Sep-2016 16:25
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mattwnz: At the moment if you buy an average shack in Auckland for 1 million, over the life of the loan, you are basically paying 2 million.



But you see, if by that time the house is worth 3 million, then they made 1 million.

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  Reply # 1620989 1-Sep-2016 17:14
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joker97:
mattwnz: At the moment if you buy an average shack in Auckland for 1 million, over the life of the loan, you are basically paying 2 million.


But you see, if by that time the house is worth 3 million, then they made 1 million.


That's a big if though. Especially as prices could go sideways for many years due to the big previous gains. Prices can also drop. Largely comes down to timing and luck.


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  Reply # 1621024 1-Sep-2016 20:03
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mattwnz:

 

joker97:
mattwnz: At the moment if you buy an average shack in Auckland for 1 million, over the life of the loan, you are basically paying 2 million.


But you see, if by that time the house is worth 3 million, then they made 1 million.


That's a big if though. Especially as prices could go sideways for many years due to the big previous gains. Prices can also drop. Largely comes down to timing and luck.

 

 

I'd love for it to drop. But what makes it drop will be the reverse of what makes it go up. Demand. Some people somewhere have been buying them. Not Aucklanders obviously - supposedly they can't afford it.

 

So what made non Aucklanders want to buy ... ? I am guessing immigration (remember return of expats could be a big thing) and foreign investment - either legally: rich people or people with access to cheap loan or illegally: money laundering.

 

AFAIK the govt has no data. In the last 25 years they have not collected a single piece of information.

 

Compared with house prices in major cities around the world, if the demand for Auckland is there it will continue to rise. (Remember we are not comparing price to income - we have determined that there isn't a single house within reach of an average Auckland first home buyer for a while now, so there is no point comparing house prices to income of an average Aucklander. THe money comes from some big pot in the sky somewhere)


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  Reply # 1621107 2-Sep-2016 00:09
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joker97:

 

In the last 25 years they have not collected a single piece of information.

 

 

 

 

 

 

You have to wonder why, and why they are only now starting to collect information about who is buying the houses. I would have thought it was very important for things like town planning, and infrastructure, as well as health and schools. We have statistics for almost everything else.
The huge increase in immigration, and not really knowing the health and other  requirements of these people coming into NZ, really makes me worry about the next 10-20 years in NZ, and what the country will look like. We already have some horrible housing developments that have been built that will likely become ghettos, which are linked to crime. 


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  Reply # 1621112 2-Sep-2016 00:16
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mattwnz:

 

joker97:

 

In the last 25 years they have not collected a single piece of information.

 

 

 

 

 

 

You have to wonder why, and why they are only now starting to collect information about who is buying the houses. I would have thought it was very important for things like town planning, and infrastructure, as well as health and schools. We have statistics for almost everything else.
The huge increase in immigration, and not really knowing the health and other  requirements of these people coming into NZ, really makes me worry about the next 10-20 years in NZ, and what the country will look like. We already have some horrible housing developments that have been built that will likely become ghettos, which are linked to crime. 

 

 

 

 

Not sure what you mean about not knowing the medical requirements. Immigration medicals are quite strict.






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  Reply # 1621136 2-Sep-2016 06:16
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And we go back to the insistence of living in Auckland.

 

There are many, many countries in the world where a 1.5 - 2 hour commute each way is not abnormal.

 

Most first home buyers in Melbourne are living at least an hour out of Melbourne in the outer suburbs.

 

It is not realistic to think you are going to be able to buy a house close to Auckland as your first home.

 

There are some areas that need drastic improvement, a decent rail and public transport system, more money on roading, I am for tolls/ extra fuel taxes if it improves the roading quickly.

 

 


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  Reply # 1621151 2-Sep-2016 07:54
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dickytim:

 

And we go back to the insistence of living in Auckland.

 

There are many, many countries in the world where a 1.5 - 2 hour commute each way is not abnormal.

 

Most first home buyers in Melbourne are living at least an hour out of Melbourne in the outer suburbs.

 

It is not realistic to think you are going to be able to buy a house close to Auckland as your first home.

 

There are some areas that need drastic improvement, a decent rail and public transport system, more money on roading, I am for tolls/ extra fuel taxes if it improves the roading quickly.

 

 

Looking from history every NZ govt cannot plan, has never been able to plan, will never do it. Just doesn't seem to have the ability to. Yell taunts at each other in parliament, very clever at that. Doing something that plans for the future ... name one.


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  Reply # 1621158 2-Sep-2016 08:21
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joker97:

 

Looking from history every NZ govt cannot plan, has never been able to plan, will never do it. Just doesn't seem to have the ability to. Yell taunts at each other in parliament, very clever at that. Doing something that plans for the future ... name one.

 

 

Building all the hydro dams


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  Reply # 1621164 2-Sep-2016 08:38
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joker97:

 

dickytim:

 

And we go back to the insistence of living in Auckland.

 

There are many, many countries in the world where a 1.5 - 2 hour commute each way is not abnormal.

 

Most first home buyers in Melbourne are living at least an hour out of Melbourne in the outer suburbs.

 

It is not realistic to think you are going to be able to buy a house close to Auckland as your first home.

 

There are some areas that need drastic improvement, a decent rail and public transport system, more money on roading, I am for tolls/ extra fuel taxes if it improves the roading quickly.

 

 

Looking from history every NZ govt cannot plan, has never been able to plan, will never do it. Just doesn't seem to have the ability to. Yell taunts at each other in parliament, very clever at that. Doing something that plans for the future ... name one.

 

 

 

 

Off the top of my head....EQC , Cook Strait Cable, UFB, Wind Farms, Fisheries Protection, Conservation, Natural Gas Exploration, Earthquake building standards, just to name a few.





Mike
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The views stated in my posts are my personal views and not that of any other organisation.

 

 Mac user, Windows curser, Chrome OS desired.

 

The great divide is the lies from both sides.

 

 


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  Reply # 1621172 2-Sep-2016 08:52
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Geektastic:

 

mattwnz:

 

joker97:

 

In the last 25 years they have not collected a single piece of information.

 

 

 

 

 

 

You have to wonder why, and why they are only now starting to collect information about who is buying the houses. I would have thought it was very important for things like town planning, and infrastructure, as well as health and schools. We have statistics for almost everything else.
The huge increase in immigration, and not really knowing the health and other  requirements of these people coming into NZ, really makes me worry about the next 10-20 years in NZ, and what the country will look like. We already have some horrible housing developments that have been built that will likely become ghettos, which are linked to crime. 

 

 

 

 

Not sure what you mean about not knowing the medical requirements. Immigration medicals are quite strict.

 

 

I think there's some misunderstanding here... stats *are* collected about immigrants. What @joker97 meant was that stats on the residency/citizenship/nationality of house buyers are not collected.

 

From a health/schooling/town planning point of view, your residency is important, not your nationality. Whether you own a house or not (or several houses) isn't particularly important either.

 

 


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  Reply # 1621174 2-Sep-2016 08:55
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frankv:

 

Geektastic:

 

mattwnz:

 

joker97:

 

In the last 25 years they have not collected a single piece of information.

 

 

 

 

 

 

You have to wonder why, and why they are only now starting to collect information about who is buying the houses. I would have thought it was very important for things like town planning, and infrastructure, as well as health and schools. We have statistics for almost everything else.
The huge increase in immigration, and not really knowing the health and other  requirements of these people coming into NZ, really makes me worry about the next 10-20 years in NZ, and what the country will look like. We already have some horrible housing developments that have been built that will likely become ghettos, which are linked to crime. 

 

 

 

 

Not sure what you mean about not knowing the medical requirements. Immigration medicals are quite strict.

 

 

I think there's some misunderstanding here... stats *are* collected about immigrants. What @joker97 meant was that stats on the residency/citizenship/nationality of house buyers are not collected.

 

From a health/schooling/town planning point of view, your residency is important, not your nationality. Whether you own a house or not (or several houses) isn't particularly important either.

 

 

 

 

 

 

hmmm Statistics NZ, Census comes to mind.





Mike
Retired IT Manager. 
The views stated in my posts are my personal views and not that of any other organisation.

 

 Mac user, Windows curser, Chrome OS desired.

 

The great divide is the lies from both sides.

 

 


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