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How will the current boom end?

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  • #16
    Originally posted by Bobsyouruncle View Post
    How long do you think it will be before you all realise this is probably the new normal. This is normal in so many cities and somehow Auckland is going to be uniquely different. I doubt it.
    Exactly which part of the current situation is the 'new normal' Dean?

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    • #17
      Originally posted by Wayne View Post
      Exactly which part of the current situation is the 'new normal' Dean?
      How do you know it's Dean?

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      • #18
        Exactly which part of the current situation is the 'new normal' Dean?
        High price to income ratio, continuing appreciation, demand and never ending whinging about affordability. Of course the usual cycles will win out but we are now just like so many super desirable cities, ridiculously expensive putting many, many people out of reach of ownership.

        It's not abnormal, just new for Auckland.

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        • #19
          When you say 'continuing appreciation' do you believe it will continue at the current levels - 10-15% year on year?

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          • #20
            Originally posted by Eugene View Post
            How do you know it's Dean?
            Apart from spending time in Fiji helping other, property and interests in the US, going broke during the GFC (all bits of past posts)?
            Could be his evil twin I suppose.

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            • #21
              When you say 'continuing appreciation' do you believe it will continue at the current levels - 10-15% year on year?
              Mate who knows. I certainly think it will continue to average 100 gains every decade.

              RE similar cities just a few headlines........

              Housing 'severely unaffordable' as Sydney price to income ratio worsens

              Australia’s five major metropolitan areas have been “severely unaffordable” for 11 consecutive years.
              Singapore’s Housing Is “Seriously Unaffordable”

              Millions of London parents are seeing their children forced to move out of the capital by the housing shortage, a leading charity warned today.
              Most Londoners now fear their offspring will never be able to afford decent homes nearby because of ballooning prices and rents.

              Vancouver ranks third most unaffordable housing market in study, worse than New York and London

              “Although most New Yorkers probably feel that housing in the city is too expensive, it is primarily those earning under $40,000 who literally may not be able to find an apartment they can afford,” reads the report. In 2012, those making between $20,000 and $40,000 a year spent 44 percent of their income on rent. According to federal guidelines, “Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care.”

              Hong Kong's stratospherically expensive housing market is so unaffordable it's set a new global record.

              The median price of a home in Hong Kong is 19 times the city's median annual household income, according to the latest survey by the public policy firm Demographia.

              Welcome to the new normal.

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              • #22
                Originally posted by Wayne View Post
                Apart from spending time in Fiji helping other, property and interests in the US, going broke during the GFC (all bits of past posts)?
                Could be his evil twin I suppose.
                Ok, probably is Dean.
                You seem to take notice of him.
                Myself, I always took notice of Damap.

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                • #23
                  I have a disgruntled Auckland Tenant saying "our combined income is over $200k, we have a $50k cash deposit, and we still can't get a mortgage for a $550k house"

                  They move out 9th September and are heading to Sydney.

                  Arrrr. Good luck with that....

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                  • #24
                    If by Sydney they mean within 3 hours of the CBD they'll find something easy enough. Remember you can get 95% lending in OZ still.

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                    • #25
                      Originally posted by The_Dog View Post
                      I have a disgruntled Auckland Tenant saying "our combined income is over $200k, we have a $50k cash deposit, and we still can't get a mortgage for a $550k house"

                      They move out 9th September and are heading to Sydney.

                      Arrrr. Good luck with that....
                      I think you mis-understand the point here...

                      If a young couple is on $200k combined and has say $50k saved (let's face it not a small amount of money saved up by any other context), if they feel that they are inevitably priced out of the market (and unable to catch up) then they may very well decide to move to a more expensive city (even if they have to rent) particularly if that city has more to offer.

                      In their instance they may find better paying and more rewarding careers which makes it easier to forgo the prospect of home-ownership. If this logic wasn't true, then nobody in their right mind would move to the likes of London.

                      It's actually a sad state of affairs when $100k-$200k combined income can barely put you on the ladder. I was talking to a teacher the other day who earns $50k, has minimal savings and is considering a move to Melbourne as at least she could have a more fun lifestyle in her 20's.

                      If this effect spreads then we might start to say a big exodus of kiwis who are currently doing important yet underpaid roles within Auckland.

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                      • #26
                        Originally posted by WINZ View Post

                        It's actually a sad state of affairs when $100k-$200k combined income can barely put you on the ladder.
                        Are you serious? With that sort of income, they should be able to save $100K per annum. I don't blame the banks for not wanting to lend to them. They must have serious budgeting fails.
                        My blog. From personal experience.
                        http://statehousinginnz.wordpress.com/

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                        • #27
                          I agree. I don't think I ever earned that much even working in finance in Tokyo at "peak yen" and managed to get by on next to nothing to get into property.
                          Free online Property Investment Course from iFindProperty, a residential investment property agency.

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                          • #28
                            Originally posted by WINZ View Post
                            I was talking to a teacher the other day who earns $50k, has minimal savings and is considering a move to Melbourne as at least she could have a more fun lifestyle in her 20's.
                            ... and will still be moaning how, at 40, she's got no savings, earns $100k as a 'teacher team leader' or some such and can't afford a house.

                            Nothing comes for nothing.
                            DFTBA

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                            • #29
                              Not sure why so many Kiwi's think Australia is the answer to their woes...

                              Sydney pricing is as bad, if not worse than Auckland... Transport issues in a city of 4-5million is worse than Auckland and the run up of prices similar - don't have the actual data handy but from memory Syd has been double digit growth rates for 3+years.

                              Melbourne is about 30% behind Sydney in price... If you live 45 mins off peak from city you could buy a house needing full renovation selling for $400k. A place like this would rent for around 4% gross. If you want to live within 10kms of CBD you're going to spend well over $1million for a house. At peak 10kms could be 30mins commute...

                              Brisbane is a little further back again I don't have much info on but I can't see it being that far behind.

                              wages might be higher... But so are taxes with the top tax rate on individuals being $0.48 I think... Far above the NZ top tax bracket... Fuel is a bit cheaper but most other things are comparable.

                              if you hear people telling you that Aus is the answer... In reality they're fooling themselves.

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                              • #30
                                Originally posted by Don't believe the Hype View Post
                                I you hear people telling you that Aus is the answer... In reality they're fooling themselves.
                                Ahhhh, but I suspect that depends on the question.
                                Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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