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  1. #1
    Join Date
    Sep 2008
    Posts
    7,529

    Default are nz houses over-priced?

    here's an interesting exercise for you

    go to the page at bottom

    at the top of the graph, click on the blue box and select "prices against average income"

    then on the right side select all 20 countries

    http://www.economist.com/blogs/freee...l_house_prices

    you'll see that only hong kong has more expensive housing compared to income

    why is this?

    perhaps because we demand to live in 1st world homes

    but only earn 2nd world wages...

    unless the country can earn more through exports we simply can't afford australian homes with 2 car internal garages, ensuites, studys, rumpus rooms, ice-making fridges and 42inch lcd tvs

    what we can afford is 3 bedrooms, living room, kitchen, car port, normal fridge and a 26'tv

    this shouldn't be surprising

    afterall, our productivity, size, exports and location, all slot us somewhere between australia, on 1 side and fiji, tonga and samoa, on the other
    have you defeated them?
    your demons

  2. #2
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,563

    Default

    This information/graph doesn't say we have the second highest house prices compared to income!

    It shows that our house prices since 2004 have increased the 2nd most compared to income. This could be house prices have increased too much, or it could be that incomes are too low.

    Very interesting that it shows our rents compared to house prices have stayed at 100 from 2004 to 2011. So my take on this is that its showing that rents have increased as much as property over this time period, which really surprises me

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  3. #3
    Join Date
    May 2008
    Posts
    3,508

    Default

    No.
    We are prepared to spend more of our income on our house than residents do in other countries.

  4. #4
    Join Date
    Jun 2005
    Location
    Auckland
    Posts
    5,084

    Default

    House price index for NZ 1997-2002 is interesting in that it flat-lined.

    Compare to 2007-2010 (and beyond, I'd suggest) - very similar story, and it's 2012 soon ......

    IIRC, it was an immigration boom that started the last boom? What, if anything, will do it next time?
    DFTBA

  5. #5
    Join Date
    Sep 2004
    Location
    Central Otago, ChCh, AKL
    Posts
    2,443

    Default

    House price index for NZ 1997-2002 is interesting in that it flat-lined.
    I think in the past especially prior to the last boom NZ Property prices was somewhat under priced.


    from around 2002 NZ appeared to the world as not so far away as it used to be, Safe place and the general exposure for NZ grow globally.

    Via lower Travel costs, Film industry and cable TV etc.


    Considering that I don't think NZ house prices will EVER go back to the 3 Times House hold income affordability as it use to be prior to the boom. - Not in the main centers and popular / recreational places / towns anyway.

    I think some financial and "fundamentals " have changed with time and Progress.

    In general I believe The next property boom will not be as long and as big as the last one (2002 - 2007).
    Last edited by Orkibi; 09-07-2011 at 09:55 AM.
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