Month: June, 2014

Times Are Changing

houses up

Few people would have predicted the economic processes which led to house prices doubling over the last decade. Indeed, it surely is a sign of the times when our governments are all trying ceaselessly to promise and then provide circumstances for apparently infinite economic growth. But what is the reality behind these efforts for New Zealand and its property market? Labour has put forth a number of suggestions and propositions as to how it will handle future economic growth but the list itself reads like a codified, ancient manuscript which only the most economically literate of us would be able to decipher and put to any practical understanding. But a few plans do stand out and warrant comment. For example, New Zealand is recognised as an attractive place for foreign investment. This surely means good things as, when our own money is going to be tied up in mortgages and paying for increasingly expensive basic amenities, any money input we can attract is going to be vital. As for housing, Labour wish to ban non-resident foreigners from buying property here. this could perturb investment from some areas, in particularly Asia from who we’re seeing record numbers of visitors and migrants year after year.

Good time to buy?

Costs VS Comfort

In my last post I noted how the economic troubles which most of the developed world is now struggling against seem to not be affecting one group of people, the rich. So what position does this leave the rest of us in? A recent news story noted that New Zealand is enjoying its 6th year of increased economic growth. This is good news right? After all, growth in the economy, we’re constantly reassured, is the solution to our troubles and will mean our eventual emergence from austerity and hardship. However, this report seems to offset this potentially good news by noting that New Zealand house prices are among the most expensive in the world. One labour MP noting that it costs 50% of the average wage to pay the average mortgage. With over half our money spent on maintaining a property that few people get to spend even half their time in, this balance doesn’t seem right to me. Admittedly, it’s a similar situation in most of the developed world with people settling into the idea and never questioning it. Preferring instead to argue over money, incomes, costs, loans and economic figures, could we be paying a much higher price than we realise?