Why housing costs are so ridiculously high

[Ocean1]

If your going to make cheap houses, there needs to be a standard which they are healthy to live in and the ground needs to be above the water table. Not some cheap freezing cold shitboxes which leak.

But your right, it would work for some. Its just getting work for people to do so they can reasonably be able to pay for it. - this is the kicker

The general bleating about house pricing almost always fails to compare apples with apples. Your parents/grandparents could afford a cheap, freezing cold 90sqM shitbox that met the standards of their day, (just) they almost certainly couldn't have afforded the 200sqM palace today's prospective homeowners are comparing it to.

NZ houses are amongst the largest and best appointed in the world, and frankly, I don't give a shit how many people can't afford these 200sqM palaces. But I do care that a generation of kids are denied the basic entry-level house our parents were proud to own and in which they raised us, with varying degrees of success.

Make no bones about it, ill conceived building standards and arbitrary council compliance costs are a large part of the reason for today's house prices, they're the delight of every monopoly currently profiting from them. If we were allowed to and if the building sites were available then economies of scale and superior materials and design would today make the cost of those small 3 bdrm "sub-standard" homes our parents started with a fair bit less than it ever cost them, certainly not more.

[Ocean1]

A rather ordinary 2 bed unit in a block of 6 next to me sold for $535 000 last week.

Assuming it was a Landlord type who bought it for a moment.

6% of that is $32 000

so $615 a week in interest payments.

+ rates, insurance and other bits..

I'm guessing the rent is going to go up.

But hey, can claim the interest off you tax and all the expenses as its " just like running a business"

Looking at the interest you get off savings and the 33% that the IRD take its not worth bothering with savings.

So, rather than making it more expensive for both investor and tenant to do their thing by taxing them harder why don't we make it easier and more profitable to invest the money in local business? Current going rate for a general business loan is around 7.5%, I was hoping peer to peer structured lending would shorten that AND make investments other than housing more attractive for Mum and Dad's retirement nest egg, but so far it's looking like just another financial institution rort.

[eldog]

NZ houses are amongst the largest and best appointed in the world, and frankly, I don't give a shit how many people can't afford these 200sqM palaces. But I do care that a generation of kids are denied the basic entry-level house our parents were proud to own and in which they raised us, with varying degrees of success.

I live in one of these 200sqM houses not a modern one. I pay out 75%+ of my wages each week on the mortgage alone. I save where I can, but I have been lucky.

Ocean1 - I agree with you about general housing just how we can achieve this I don't know. Obviously we need more work so people can earn to pay. But we also need to build decent homes.
I don't want to see blocks of apartments like the UK.
Maybe make home owning some sort of priority.. and rentals not a money making exercise

Some people (like KBers) don't want to be told what to do there lies the problem, do we make home owning a state enterprise

I am just not sure.

On the other hand I have seen some people don't give a shit about their homes.....

[Ocean1]

On the other hand I have seen some people don't give a shit about there homes.....

Aye, in my experience those who live in homes they haven't worked hard to own.

[JimO]

Aye, in my experience those who live in homes they haven't worked hard to own.

and a lot of tenants

[mada]

If govt. had balls it would stop subsidising this un-productive part of the economy:

1 - remove the accommodation supplement which is costing approx 2 Billion per annum to top up rents for those who can't afford them.
2 - make the interest on rental property non taxdeductable

As it is now the taxpayer is paying a double wammy to rental property owners and property investors with subsidises that are inflating the market rates.

But instead Key and Smith... want to increase these fucking subsidies

http://www.radionz.co.nz/news/politi...ess-poverty-pm

[Voltaire]

My guess would be there are a lot of Govt types with rental properties.

[Stylo]

I live in one of these 200sqM houses not a modern one. I pay out 75%+ of my wages each week on the mortgage alone. I save where I can, but I have been lucky.

Ocean1 - I agree with you about general housing just how we can achieve this I don't know. Obviously we need more work so people can earn to pay. But we also need to build decent homes.
I don't want to see blocks of apartments like the UK.
Maybe make home owning some sort of priority.. and rentals not a money making exercise

Some people (like KBers) don't want to be told what to do there lies the problem, do we make home owning a state enterprise

I am just not sure.

On the other hand I have seen some people don't give a shit about their homes.....

75% !

That's a serious amount of wedge coming out of your back pocket eldog. Don't know how you do it ...

[gjm]

Seen the news today?

People queued overnight for the opportunity to pay $420k+ for bare 800-1200m sections in Beachlands.

When that is happening, the game is up. Affordable housing? Where...?

Of course, the real estate agents have jumped on this. 12 sections, at an average of (say) 450k gives a sale price of $5.4m, of which they will take their usual percentage. Good earning for very little effort.

At least they did price these sections. Another agent is selling 12 more similar sections at auction in a couple of weeks to "let the market decide" what they are worth. Lazy bastards - take a cut but don't even bother valuing anything anymore.

[bogan]

People queued overnight for the opportunity to pay $420k+ for bare 800-1200m sections in Beachlands.

When that is happening, the game is up. Affordable housing? Where...?

Most places that aren't fucking Beachlands. You can get house and property build brand new for that in hamilton.

[husaberg]

Most places that aren't fucking Beachlands. You can get house and property build brand new for that in hamilton.

Get a few in one place that the government has effectively destroyed now
http://www.realestate.co.nz/resident...0/suburbs/1666

Nice Villa
http://www.realestate.co.nz/1928417
New build
http://www.realestate.co.nz/2252979
First Home buyers
http://www.realestate.co.nz/2283875

[eldog]

75% !

That's a serious amount of wedge coming out of your back pocket eldog. Don't know how you do it ...

I am determined to pay the bastard off ASAP because I can see the long term benefits.

It means long hours at work, going without etc. I spend carefully on good gear so it lasts. If I cant afford it I dont buy it. But I have been lucky and my mistress works too.

It doesnt suit everyone. I hope to be debt free when I retire.

make sure you plan stuff.

[pete376403]

My guess would be there are a lot of Govt types with rental properties.

Like this guy for example:

"Owner Stephen Henry, who is chief operating officer at the Ministry of Foreign Affairs and Trade, said he was selling the property to shake up his portfolio.

The Kensington was already in the building when he bought it, and the brothel had been "fine" as a tenant."


http://www.stuff.co.nz/life-style/ho...-brothel-The-K

[Voltaire]

My fav of the week on TM
Wanganui. Under 500k....would have got you a section in Beachlands ( only 90 minits drive from city)


http://www.trademe.co.nz/Browse/List...x?id=798477150

[Gadget1]

I am determined to pay the bastard off ASAP because I can see the long term benefits.

It means long hours at work, going without etc. I spend carefully on good gear so it lasts. If I cant afford it I dont buy it. But I have been lucky and my mistress works too.

It doesnt suit everyone. I hope to be debt free when I retire.

make sure you plan stuff.

Good on ya! Changing to fortnightly payments instead of monthly and shortening the term of the loan etc all reduce the amount of interest paid on a mortgage.