Why housing costs are so ridiculously high

[gjm]

House prices are rising because realestate agents (4% commission on the first $500k, 2% thereafter) keep telling sellers they can get more for a given property. Across the board increases in advertised prices leads to a perception that prices are rising, meaning buyers (those that can) indebt themselves for longer and for more money to buy.

The agents win. If house prices crash, they'll sell house on behalf of the mortgage lender and make more money.

So you sit in a car you borrowed money to buy, on a road on the way to make more money for someone else, so you get some money to pay for that car, so you can pay the mortgage on the house you spend less and less time in.

[mada]

House prices are rising because realestate agents (4% commission on the first $500k, 2% thereafter) keep telling sellers they can get more for a given property. Across the board increases in advertised prices leads to a perception that prices are rising, meaning buyers (those that can) indebt themselves for longer and for more money to buy.

The agents win. If house prices crash, they'll sell house on behalf of the mortgage lender and make more money.

So you sit in a car you borrowed money to buy, on a road on the way to make more money for someone else, so you get some money to pay for that car, so you can pay the mortgage on the house you spend less and less time in.

That and a lot of Real Estate agents are in the game themselves... ie are property investors buying up large - inflating prices which they benefit from when their clients houses sell at a higher price.

Win win win!

[mashman]

House prices are rising because realestate agents (4% commission on the first $500k, 2% thereafter) keep telling sellers they can get more for a given property. Across the board increases in advertised prices leads to a perception that prices are rising, meaning buyers (those that can) indebt themselves for longer and for more money to buy.

The agents win. If house prices crash, they'll sell house on behalf of the mortgage lender and make more money.

So you sit in a car you borrowed money to buy, on a road on the way to make more money for someone else, so you get some money to pay for that car, so you can pay the mortgage on the house you spend less and less time in.

You wapscallion.

[mossy1200]

Its worth is what someone will pay for it. Prices increase because people pay the increased price.

[sidecar bob]

House prices are rising because realestate agents (4% commission on the first $500k, 2% thereafter) keep telling sellers they can get more for a given property. Across the board increases in advertised prices leads to a perception that prices are rising, meaning buyers (those that can) indebt themselves for longer and for more money to buy.

The agents win. If house prices crash, they'll sell house on behalf of the mortgage lender and make more money.

So you sit in a car you borrowed money to buy, on a road on the way to make more money for someone else, so you get some money to pay for that car, so you can pay the mortgage on the house you spend less and less time in.

I have now done nine property deals, purchases & sales included without using an agent. Apart from the seller feeling able to give you a better price because they are not having to fork out a fortune in agents fees for essentially nothing you can't do for yourself, there is also a great calm & direct dialogue between seller & buyer, without some third party muppet constantly popping their worthless head up creating a lot of pushing shoving & angst in a vain attempt to justify their worth.

[swarfie]

You have to drop in on Daves welding, (boat tail 60k bloke) you might learn something about engineering of the non precision type, but I doubt it.

I'm sure his "engineering" is ORSUM

[blue rider]

http://www.radionz.co.nz/news/politi...housing-crisis

The average price for a three bedroom home in the old Auckland city boundaries now stands at over $1 million.
Prime Minister John key acknowledged the rise in house prices in the city were unsustainable, but said there was no crisis.
"No, I don't think you can call it a crisis. What you can say though is that Auckland house prices have been rising, and rising too quickly actually."

bwahahahahahahahahahahahahahahahahahahahahahahahah ahahahahahahahahah

[Ocean1]

"For a builder wanting to construct a new house or do renovations on an existing one they will need to get consents, need to ensure their power tools have been "tested and tagged" every three months, need to erect a scaffold or handrail if they are working at more than one metre which can can add thousands of dollars and many extra days to a job. The needs go on. For professionals who have already gone through a Licensed Building Practitioner accreditation to ensure they are qualified still need more process at every step."


http://www.stuff.co.nz/business/smal...-of-compliance

[mossy1200]

"For a builder wanting to construct a new house or do renovations on an existing one they will need to get consents, need to ensure their power tools have been "tested and tagged" every three months, need to erect a scaffold or handrail if they are working at more than one metre which can can add thousands of dollars and many extra days to a job. The needs go on. For professionals who have already gone through a Licensed Building Practitioner accreditation to ensure they are qualified still need more process at every step."


http://www.stuff.co.nz/business/smal...-of-compliance

Got to fill out a JSA, working and height permit and inform workplace NZ to lift the boom arm and clean a camera dome. Used to be a 20min job. Bonus is I can charge 2hrs now.

[BuzzardNZ]

I've not read any of this thread, but I'm pretty sure why this is the case, my opinion only...

It all started when the POM's wanted 2 come to NZ thru the 90's till now. Their £ was like 3 to 1 at the time, so kiwi house owners were only too happy to sell to them at a profit. I seriously believe this started the boom. I kinda also blame LOTR as that seems to have put NZ on the map as a desirable place to live.

Next, NZ imports loads of g00ks and nargs and those kunts can seem to afford the inflated prices ( by the POMs ) as they fit 20 odd people into a home to make ends meet.

Long story short, your 1st real kiwi home buyer is fucked, too much competition from the above, don't tell me I'm wrong, I'm living the nigthmare
Born and breed 4th ( maybe 5th who fucking knows ) gen NZér from Wellington, who doesn't wanna settle for Naenae, Porirua, Waihphetu, nor Wainuiomata.

[mada]

I've not read any of this thread, but I'm pretty sure why this is the case, my opinion only...

It all started when the POM's wanted 2 come to NZ thru the 90's till now. Their £ was like 3 to 1 at the time, so kiwi house owners were only too happy to sell to them at a profit. I seriously believe this started the boom. I kinda also blame LOTR as that seems to have put NZ on the map as a desirable place to live.

Next, NZ imports loads of g00ks and nargs and those kunts can seem to afford the inflated prices ( by the POMs ) as they fit 20 odd people into a home to make ends meet.

Long story short, your 1st real kiwi home buyer is fucked, too much competition from the above, don't tell me I'm wrong, I'm living the nigthmare
Born and breed 4th ( maybe 5th who fucking knows ) gen NZér from Wellington, who doesn't wanna settle for Naenae, Porirua, Waihphetu, nor Wainuiomata.

Nah based on that narrative it started in 1800's. Good to have some mana whenua input here though.

[gjm]

It all started when the POM's wanted 2 come to NZ thru the 90's till now. Their £ was like 3 to 1 at the time, so kiwi house owners were only too happy to sell to them at a profit. I seriously believe this started the boom.

When we started looking at leaving the sceptic isles of GB, I think the rates were $3.24 to £1. By the time we got here, it was well under $2 to £1 - the delay was courtesy of call-centre type information processing morons. The total cost of moving here ran to £0000s (immigration and relocation), much paid to the NZ government. (It'd take a long time to explain, but believe me - it was a long and painful process.)

So, yes, I confess the exchange rate was an initial attraction, but by the time we got here it made no difference whatsoever. As we were moving for quality of life and not financial gain or 'things', it didn't matter (so much) to us. But, I agree, that really won't have helped.

Next, NZ imports loads of g00ks and nargs and those kunts can seem to afford the inflated prices ( by the POMs ) as they fit 20 odd people into a home to make ends meet.

This. This is so true. It's frustrating, but it is their way of life, and their way of making things work - I wouldn't want to share a house with a dozen other people (and I don't think it would work for us), but I suppose it is an option. The biggest export from China and India is people, and I've heard someone say there are more islanders living here than in the islands; there was some talk a while ago about the Chinese government actually paying people to leave the country.

So, while I cannot possibly claim any sort of NZ heritage, I (like to) think we're here for the right reasons. We'll always be ex-pat poms in the eyes of many, but we're keen to be Kiwis too. We have no preconceptions or pretence to be Brits abroad... We moved to NZ, so we live like Kiwis (unlike, perhaps, too many other immigrants). Doesn't help - we're in exactly the same situation as so many others. We work hard, earn respectable money, but can't get close to starting to buy anything.

It's very frustrating. And I moan too much about it.

[TheDemonLord]

Long story short, your 1st real kiwi home buyer is fucked, too much competition from the above, don't tell me I'm wrong, I'm living the nigthmare

Yet, I did this....

Its easier to blame other people for inflating the price than to compromise on where you want to live vs where you can afford to live

[sidecar bob]

Long story short, your 1st real kiwi home buyer is fucked, too much competition from the above, don't tell me I'm wrong, I'm living the nigthmare
Born and breed 4th ( maybe 5th who fucking knows ) gen NZér from Wellington, who doesn't wanna settle for Naenae, Porirua, Waihphetu, nor Wainuiomata.

You can afford a home, but by your own admission, there's quite a lot that is beneath your minimum expectation. Good luck with that attitude & trying to get off to a start on the fourth rung of the ladder.
My first home was a relocated 50's plaster two bedroom place, in an average part of town. I made 119k on that in the early 90's, it served the purpose of keeping me warm & dry while not paying rent & was a vital first step in what has been an interesting & worthwhile trip on the property investment ladder.
Take a punt on an old shitter in a half decent street, what's the worst that could happen? you end up with a place to live & the "rent" goes back to you.
Or you can tidy it up while living in it, then put a tenant in it to continue to pay it off, get it revalued, use your newly realised equity in it, which will include the deposit you put on it, plus the added value you put into it by tidying it up, as a deposit on a nicer place that better suits your needs & expectations. Later sell it without using a worthless & expensive estate agent & use the money you pull out of it to bang a hole in the mortgage of the second place, or keep it as an investment property. (Absolute minimum two year plan)
Yes, it does take some ball bag, but if you are not a wanker about it, you should be ok. Being a wanker includes trying to have the latest & best of everything, cars, bikes & appliances etc on tick while you are trying to achieve this, the cool stuff will come later once you have established yourself.

[neels]

You can afford a home, but by your own admission, there's quite a lot that is beneath your minimum expectation. Good luck with that attitude & trying to get off to a start on the fourth rung of the ladder.
My first home was a relocated 50's plaster two bedroom place, in an average part of town. I made 119k on that in the early 90's, it served the purpose of keeping me warm & dry while not paying rent & was a vital first step in what has been an interesting & worthwhile trip on the property investment ladder.
Take a punt on an old shitter in a half decent street, what's the worst that could happen? you end up with a place to live & the "rent" goes back to you.
Or you can tidy it up while living in it, then put a tenant in it to continue to pay it off, get it revalued, use your newly realised equity in it, which will include the deposit you put on it, plus the added value you put into it by tidying it up, as a deposit on a nicer place that better suits your needs & expectations. Later sell it without using a worthless & expensive estate agent & use the money you pull out of it to bang a hole in the mortgage of the second place, or keep it as an investment property. (Absolute minimum two year plan)
Yes, it does take some ball bag, but if you are not a wanker about it, you should be ok. Being a wanker includes trying to have the latest & best of everything, cars, bikes & appliances etc on tick while you are trying to achieve this, the cool stuff will come later once you have established yourself.

I agree with pretty much all of the above, it can be done, and plenty of the young fellas that work for me are doing it.

I remember me and the missus moving into our first flat with a bed, a free couch and a 14" tv sitting on a beer crate to furnish the place, seems a long way back now but time and a shitload of work has life looking pretty good now. The deposit for our first house came from saving 10% of our net income for 10 years, as well as me working a second job, so I struggle to have too much sympathy for people with $1000 cellphones and cars worth more than any car I've ever owned on finance along with a houseful of furniture and a home theatre system and a gaming computer complaining they can't save a deposit.

I don't think I'll ever know what it's like to walk into a brand new house, I just can't bring myself to pay the premium when there are so many houses out there that can have so much value added with a bit of time and money, I guess that means I'll also never know what it's like to have a house with the butlers pantry that seems to be so essential in a first home these days.