Financial Armageddon!!

[LifeBroker]

Unless average household incomes increase HUGELY its at best going to flatline as rates continue to fall going forward

Average household income will not increase hugely. With immigration/supply being constant or increasing, pay will stay the same.

[JBM]

Average household income will not increase hugely. With immigration/supply being constant or increasing, pay will stay the same.

Unless like we see in central Otago region(and I’m sure many others) employers forced to pay more to attract skilled workers .. as costs of living are so high now(limited rentals)
only rich immigrants can afford to shift here .. housing here has really outpaced av. Incomes

We really need no property growth in value for the next decade to let inflation in incomes to catch up

[Chris W]

We really need no property growth in value for the next decade to let inflation in incomes to catch up

Another way of achieving the outcome of more affordable housing for the local population earning local incomes would be if property prices fell (for potential owner occupier property buyers), or rentals fell (for renters).

[eri]

^

would anyone ever bother building again?

much easier to fight over old houses

...

i see some auckland apartments, yet to be built, are now priced at about 20,000/m2

so $700,000 for a minimum sized 35m2 studio??? that could be rented out for $500pw??? a return of <3?%???...why bother with capital gain

seems to me that puts a floor under how far prices could fall

...

meanwhile trump says if he's not reelected

it will trigger the next recession

https://www.stuff.co.nz/world/americas/donald-trumps-america/113526568/trump-warns-of-stock-market-crash-if-hes-not-reelected-in-2020

considering we are starting to be overdue one

and the US bond yields? are flashing red...

but he has a point

the coalition winning in nz stopped the economy + a lot of investment here

a democratic victory there in 2020? would probably bring their/our next crash forward a few years

[flyernzl]

"affordable housing for the local population earning local incomes would be if property prices fell (for potential owner occupier property buyers), or rentals fell (for renters)"

Or if the overhead costs of owning rental property - such as council rates and insurance premiums - actually decreased instead of going up by 50% over recent years.

[DaveW]

"affordable housing for the local population earning local incomes would be if property prices fell (for potential owner occupier property buyers), or rentals fell (for renters)"

Or if the overhead costs of owning rental property - such as council rates and insurance premiums - actually decreased instead of going up by 50% over recent years.

Or if expectations decrease and people buy and live in flats, as in the UK.
Infill housing will increase so you can bet that land prices in populated areas will continue to increase.

[Bob Kane]

We really need no property growth in value for the next decade to let inflation in incomes to catch up

How likely it that?
And why do we really need it?
For what it's worth, over the next 10 years, I expect property prices to continue increasing and wages to barely increase.
This will cause some grief.

[JBM]

How likely it that?
And why do we really need it?
For what it's worth, over the next 10 years, I expect property prices to continue increasing and wages to barely increase.
This will cause some grief.

It's already causing grief ... NZ has one of the most unaffordable housing markets in the world

[Perry]

Or low wages compared to the cost of living. Wasn't it Blenglish who mumbled something about NZ becoming a low wage economy, servicing Oz?

[McDuck]

Or low wages compared to the cost of living. Wasn't it Blenglish who mumbled something about NZ becoming a low wage economy, servicing Oz?

Change.
You do expect it.
You do need the change to happen in a way that keeps society working smoothly.
Since we use money to allocate resources, money flow has to be working.
You have to make sure the rules point that money in the right direction.
Interest groups like Big bankers and Big Corporations and Big retailers will be looking at ways to rout the system.
That's what they have done here.
I could tell you how.. but I'm sure you can figure it out yourself.
They win the money game for themselves in the short term, but make the system unsustainable for everyone in the long term.
That's what's happened here.

[Bob Kane]

It's already causing grief ... NZ has one of the most unaffordable housing markets in the world

If NZ houses were unaffordable then why are there so many sales?
There's is no such thing as unaffordable housing.
There's do-gooders running around bleating about house prices being too high and expecting something to be done about it.
Sorry, that's just the way the market works.

[Perry]

There's is no such thing as unaffordable housing.
There's do-gooders running around bleating about house prices being too high and expecting something to be done about it.
Sorry, that's just the way the market works.

So it's 'the market' that's at fault?

See flyer's post, here.

[Chris W]

There's is no such thing as unaffordable housing.

FYI, the economists definition of "unaffordable housing" is different to your definition of "unaffordable housing". If you want to understand what the media and commentators are referring to, here is the definition of "unaffordable housing" that they refer to.

Definition of 'Affordable Housing'

Definition: Affordable housing refers to housing units that are affordable by that section of society whose income is below the median household income.

Description: Though different countries have different definitions for affordable housing, but it is largely the same, i.e. affordable housing should address the housing needs of the lower or middle income households. Affordable housing becomes a key issue especially in developing nations where a majority of the population isn't able to buy houses at the market price.

Disposable income of the people remains the primary factor in determining the affordability. As a result, it becomes the increased responsibility of the government to cater to the rising demand for affordable housing. The Government of India has taken various measures to meet the increased demand for affordable housing along with some developers and stressing on public-private partnerships (PPP) for development of these units.

[eri]

altering definitions to suit a political narrative

kind of like newspeak + doublethink

very orwellian

Doublethink is when a person accepts two mutually contradictory thoughts as correct without being aware or troubled by the glaring contradiction between them.

Doublethink statements like “war is peace” “freedom is slavery” “ignorance is strength” are made without discomfort.

Newspeak is a method of controlling thought through language - it is the language of fake news.

Doublespeak combines doublethink and newspeak in language that deliberately obscures, distorts, disguises, or reverses the meaning of words

to manipulate public opinion in a mass social engineering effort.

[Bob Kane]

Affordable housing becomes a key issue especially in developing nations where a majority of the population isn't able to buy houses at the market price.

It's a crazy definition.
People with below market (average) incomes can't purchase a house at a market (average) price?
Of course that will happen.
Do you expect people with below average incomes to buy houses that are above the average price?
Or are you suggesting that a magic fairy needs to provide great houses at below cost?
Someone is living in a make believe world.
Usually do-goody economists.