Hard News: Make you crazy like datura
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They are hideous. And add nothing but expense in most cases. We have a rather rude code word for them in our household.
Of course it helps not to leave a real name and phone number on an open home register unless you're genuinely interested in the place.
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A S,
The basic tenet remains. If you can't afford it, don't buy it.
If you can't afford and buy it anyway (regardless of motivation for doing so), then you really don't have anyone to blame but yourself if you suddenly find yourself in trouble.
Blaming everyone else for a bad decision will not in any way, shape or form change the outcome for those who have over extended.
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Yeah, it's not one thing; more like a perfect storm of a number of factors.
I fear this is only too true though:
a lot of people who were pressured into buying precisely because they heard and read about the rapid escalation and thought "it's now or never"I heard that sentiment expressed many, many times over the last four or five years.
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Thanks Rob. Just took a brief look at the Housing/Migration study (62-06) one of their conclusions is that migration of 1% has the effect of an 8-12% price rise for housing. In the last year, according to Stats NZ, we had about 0.34% growth by migration. So there you have it.
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... and the swarming crowd of hideous real estate agents, who have a vested interest in pushing up house prices...
I used to believe that until I had one working for me. Then it became clear to me their modus operandi is to work hardest on lowering the seller's expectations, so as to make the sale. For them, missing the sale is missing the commission, a far bigger factor than missing a few extra percentage points on the commission.
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I'm fairly young and new to the workforce (still consolidating after student days etc), and I have to say most of the people my age that I know are completely and utterly resigned to not buying a home in the medium-long term...it's just impossible.
The thought of paying 9%+ on a loan of hundreds of thousands of dollars seems completely unrealistic to me; my $30,000 (interest free) student loan is a big enough hassle!
I'm quite happy paying 'some landlord's rent' at this stage; no rates, no interest and they even mow my lawn!
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as well as all the climb-the-ladder reality TV programmes and the bloody Living Channel (which I refer to as 'Real Estate Porn')
Geoff, wouldn't those shows be pushing up the house prices in France/Italy/Name your mediterranean country here. How do those poms afford all those run down chateaus anyway.
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chateaux?
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This is my favourite typo of the week so far. I have a vision of all of us in white frocks and gloves, entering the season/marriage market...
Happy to oblige, Danielle. Buying a house seems to involve getting into a long and unhappy marriage of inconvenience with the financial institution of your choice, so you might as well invest in a season's worth of ballgowns and some bling beforehand. :)
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I'm quite happy paying 'some landlord's rent' at this stage; no rates, no interest and they even mow my lawn!
Rogan:
Really interesting comment -- and I wonder if there's any empirical data out there to back up my instinct that the younger you are, the more comfortable you are with the notion of being a long-term renter. Is real estate really the national fetish the media would like us to believe, or is this another case of middle-aged, middle-class baby boomers turning the media into a funhouse mirror?
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Check it out: the amazing NYT rent vs buy calculator.
Strictly as a financial proposition, renting is going to make a lot of sense for a lot of people. But there's more than just business considerations in buying your own house.
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I spent three or four weeks in Auckland ........... My only gripe is the serious lack of good playgrounds.
What sort of playground were you after?
There are many mediocre but usable ones dotted around all sides of our city. and lots of little hidden gems....check out the bottom of west end park in freemans bay, or the one hidden behind trees opposite the rose gardens in parnell, also the witches hat and perfect cycle track at normonton reserve in glenfield......
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Really interesting comment -- and I wonder if there's any empirical data out there to back up my instinct that the younger you are, the more comfortable you are with the notion of being a long-term renter. Is real estate really the national fetish the media would like us to believe, or is this another case of middle-aged, middle-class baby boomers turning the media into a funhouse mirror?
In Europe (and seemingly any tall city), renting is the norm rather than the exception. And regardless of social status, it appears to be a lifestyle choice, as opposed to a necessity.
Home ownership culture, on the surface of it, seems to be a New World Colony thing.
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PS: mortage interest is at least somewhat tax-deductible in the US, so that tilts the calculator in favour of buying somewhat. But realistic NZ cases come out favouring renting anyway.
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This might sound quaint, but the bursting housing bubble is neither the fault of banks, or of government. The fault lies with those who buy and sell houses, and in particular those who commit themselves to precarious levels of debt in the expectation of capital gain, thus driving a speculative bubble.
those speculators are taking a punt and if the market moves backwards they lose. Just like ticket scalpers who buy tickets for a show that doesn't sell out and no-one wants tickets for.
Just took a brief look at the Housing/Migration study (62-06) one of their conclusions is that migration of 1% has the effect of an 8-12% price rise for housing. In the last year, according to Stats NZ, we had about 0.34% growth by migration. So there you have it.
Yeah, right. And I'm guessing the same assumptions would explain the rising crime rate. Or the growth in Juice Bars.
I'm quite happy paying 'some landlord's rent' at this stage; no rates, no interest and they even mow my lawn!
Yes, and be even happier because your landlord is paying the bank 10% interest for a 4-5% return on his investment. Better him/her than you.
Folk that get out of debt before the collapse get to keep all the real money in the system, everyone else gets left with the debt.
True. I bet a few landlords wish they'd sold pre-Xmas, because now the market is moving sideways/down. And interest rates are going up.
this week's Listener (that's the one with the cover that looks like last week's, and the week before)
heh heh ... I was at the dentists on Monday and picked up what I thought was this weeks Listener ~ it was last August's!
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What public land? Do they mean parkland?
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What sort of playground were you after?
There are many mediocre but usable ones dotted around all sides of our city. and lots of little hidden gems....check out the bottom of west end park in freemans bay, or the one hidden behind trees opposite the rose gardens in parnell, also the witches hat and perfect cycle track at normonton reserve in glenfield......
samuel (and Ben too) thanks for the advice. For a while there, my family and I were seriously considering relocating back to Akl but have decided not to for the time being.
We did end up spending a fair bit of time at Madills Farm (sp) in Kohimarama where we have some family (there's quite a cool one opposite Vic Markets also). We heard of the one in Parnell but didn't check it out and I'm sure they're around but my sense is that they are far less plentiful compared with the inner west of Sydney - where I live - where houses are usually quite small and don't have back yards. It's one of the few elements of the Sydney infrastructure that seems to be in sufficient supply.
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It's kinda fashionable to blame property speculators for the housing increases, because they - well - generally parasitic. However, I believe - and perhaps I'm wrong - that it's generally accepted amongst those who have looked long and hard at the causes for the current housing market - banks and other analysts - that the issues are more a housing supply problem, and the role of speculators has been marginal.
Now, if that is indeed the case, the problem with making property speculation less desirable, is that we need private enterprise to actually build houses, and cutting too hard into their risk/benefit balance may cause more harm than good to house prices.
I have noticed that on the Herald myviews site there was a lot of talk about capital gains tax, and I wonder whether that's where their interest is coming from. If it is the case, I can't help but wonder if rather too much of the Herald Editorial's understanding of public opinion - in this, and other areas - comes about from reading the talkback radio level discussion of those with often rather more emotion invested in their opinion than understanding of facts/complexity.
Certainly, it would explain a lot...
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Affordability ... hmmm a complex issue.
Could you not also argue that NZ, lacking a compulsory superannuation regime, is lagging in the building of the necessary capital depth to pay for baby boomer retirement?
Add this to a tax/regulatory environment heavily biased in favour of property investment as the default retirement fund vehicle (and with those same baby-boomers being told in no uncertain terms they need to save in order to pay for themselves), and pressures on house prices continue to grow?
Or to put it another way, is this issue not solely about the supply and demand of land; but rather an inevitable end-product of a wide range of long-term social, economic and environmental forces, all contributing towards trends of declining affordability and home ownership?.
These demographic and economic trends might include;
The increasing wealth of baby-boomers,
Younger generations holding off on having children and buying houses, thus accumulating greater personal wealth,
A sustained period of relatively low interest rates and high immigration numbers
An increasing ability (due to greater wealth and low interest rates) to service debt, driving house and rent prices up
A scarcity of affordable land – some argue this imbalance between supply and demand is primarily because of restrictive land supply and ‘artificial’ urban limits. Others argue this is representative of the global issue of city-drift – simply put, people want to live in cities, and demand will always exceed supply. In a world of land shortage, the land owner becomes the major beneficiary.
A tax and regulatory environment that favours property investment which in turn drives up house and rental costs
Spiralling costs of housing development and planning compliance (which ultimately gets passed onto the end-purchaser). These include production costs of labour & materials, design costs of compliance & regulation, and finance costs.
Increasing costs associated with environmental sustainability
A dual income stream of those linked to the global economy whose income rises with the market and those linked to annual CPI increases who lose ground every year. In per capita terms those tied to the local economy are finding houses less affordable by the day.
The increasing desirability of urban centre for living (this is a global problem) and the associated demographic change and growth. For example Auckland is expected to hit 2million by 2050 (a conservative estimate) with housing supply and land availability insufficient to meet this growth in demand.
The deficit and the cost of infrastructure to service out-reaching areas
I think, perhaps, its a mixture of all of the above .....
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Has anyone noticed the tucked away little par in the Herald about Labour going up in the polls and National down? It would be on the front page if it was the other way round.... We suffer from a very peculiar little paper down here in Wellington but at least we never know which way it will jump on any given issue (unless it's really dull then it goes on the front page).
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Has anyone noticed the tucked away little par in the Herald about Labour going up in the polls and National down?
I struggled to find it in the online version. Do you mean the Roy Morgan poll referred to in the John Armstrong opinion piece?
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Apropos speculation: the fact that the yield of the assets in question (ie rent as a proportion of house price) is so low tells me there must be some speculative element at work.
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The basic tenet remains. If you can't afford it, don't buy it.
If you can't afford and buy it anyway (regardless of motivation for doing so), then you really don't have anyone to blame but yourself if you suddenly find yourself in trouble.
Well, yes and no. "Somewhere to live" isn't a luxury good, and the scarcity isn't artificial. "Don't buy" is great advice until ownership drops to the point where the only defence against having your income rack-rented out of you is government legislation, with various attendant problems (see: New York).
I heard that sentiment expressed many, many times over the last four or five years.
Well, that one's true, up to a point. My house was something I could just afford when I picked it up 7 years ago. I couldn't have even a couple of years later, and not at all now.
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But there's more than just business considerations in buying your own house.
General social effects, for starters, which Habitat for Humanity are big on citing, for example.
Home ownership culture, on the surface of it, seems to be a New World Colony thing.
Well, yes. In Europe there have been hundreds of years of serfdom for people to become enculturated to the idea of being an extension of a landlord's wallet. The people who shipped out of Europe for parts abroad were quite unreasonably interested in leaving behind a variety of ideas.
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Has anyone noticed the tucked away little par in the Herald about Labour going up in the polls and National down? It would be on the front page if it was the other way round....
Not so sure about that -- without wanting to waste a lot of time I don't really have tomorrow going through bound copies of the Herald, I don't really recall them giving that much prominence to any polling except the one they commission.
And it's not as if we're going to be short of poll-driven non-stories once the campaign kicks into high gear ('cause it is always cheaper and easier to hire a pollster than pay people to commit actual journalism). Was it just me, or was there really a poll being released every other day towards the end of the last election campaign?
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