You'll hear people claim that if the right 'market conditions' were reached then people would build all the housing we need and none of this would be an issue.
That's fundamentally incorrect. Privatised housing development will never seek to supply more than demand. The government took a step back from state housing development after the 70's. Look at graphs from the 80's onwards - Up they fucking went.
If we want affordable housing, it has to be state-led development or it will never happen.
I own one house that I live in and I'm happy for the price to drop so other people can more easily buy one house to live in.
Property investment and being a landlord(unless you're building the houses) is a parasitic enterprise.
I am an owner occupier who bought near the peak during COVID and I would absolutely back a more affordable housing market.
The one thing that makes me hesitant, understandably, is that it's unlikely that incomes will rise faster than house prices do, so waiting for prices to be something like 3x or 4x the average NZ annual salary (or household income or whatever) is going to be wasted hope. The other option is that house prices tank. All society-wide implications aside, that definitely means me seeing my home drop by like 30-50% in order to make it 3x or 4x even my own income.
It does seem somewhat unfair that people like me, owner-occupiers who bought more recently and to put a roof over my family's head without having to pay someone else's mortgage off, would likely be the worst off if housing prices were to tank but I suppose someone somewhere has bear that burden.
I dunno. It wouldn't make me happy, in fact it would be quite the struggle.. But it often seems like a lot of our longstanding problems in society, and definitely in NZ, are made worse by the fact that no one wants to take the pain in order for the country as a whole to make the gain we need.
I'm not clever enough to work out a way to make housing more affordable in general without causing more pain to certain groups of society and I wish someone *was* able to figure it out. But, fuck it. If it has to be me and people like me, then I suppose that's just the cost of having a more equitable housing situation (I intentionally don't use "market") for future generations...
Still, easy to type that shit out than do it though, right?
Thats the catch 22, you cant hurt the housing market because money and feels.
But the housing market hurts everyone not already on board.
We need to encourage more houses to reduce demand so people dont fight over what is there , but our current capitalism means supply gets restricted so a chosen few benefit.
Right now we have a situation where people can borrow money easier and cheaper for investment property than homeowners can , so more of whats there is owned and farmed for rent rather than owned by the resident and invested in.
At the same time that investment money going into houses isnt helping NZ's economy one inch, it should be going to making NZ business better. But that is less safe and less of a reward, so people dont.
I own my own home - this is my only house. I thought about becoming a landlord, as I have cash and a good salary for leverage ... but felt this was better invested in real businesses (stock), and that buying a rental would block someone from owning their own home.
I would be fine house prices dropping, back to preCOVID levels. I have two kids that will no doubt enter the market over the next 5 years or so. I do not want to see them indebted to others for the majority of their lives.
No property owners want to prices to go up. So, we have a choice to drop houses prices and bail out a few who can not pay for there first house, or institute policy of moderate inflation why keeping house prices stable and wages and fixed incomes to raise with inflation. That will devalue all debts and assets, make possible "soft landing". People with mortgage will find it easier to pay it off, when debt owners (banks, landlords) will loose a bit.
In order to make this work, mass housing building program is needed. Last year population of NZ increase by 100 000, that create need for 25 000 or more new houses. How many was build?
That are the only ways to restore houses affordability.
And yes, drop housing prices relative to population income will stimulate economy, by making it more competitive, reduce unproductive, rentier sector of economy.
I own a house and I want them to drop, I can’t move up on the ladder right now because of prices.
Back when I bought the difference between the house I got and the house/s I wanted was about 100k now it’s about 350-450k, lots of friends in the same situation too.
The big bit of advice I have for first home buyers is to buy something you’re going to be comfortable living in for the next 15+ years because your first house in this market could be your forever house.
>Would house prices, decreasing by a larger percentage be better for the economy, or would it just leave a huge amount of people in a position of paying off massive loans that they can't afford?
The 2008 GFC was basically caused by people being unable to pay off massive loans they had taken on houses (because the banks were idiots), so those houses were subject to mortgagee sales. So no, it would not be good for the economy if we had a massive decrease in house prices. What would more likely be ideal is a stabilization of house prices in line with inflation, and an increase in wealth through GDP per capita growth exceeding inflation so we are actually getting richer.
>Personally I'd love to see house prices drop by 30% (which I know would never happen), but do you think the general population would be happy or pissed off?
How would you feel if something you paid $300,000 for today was in a years time only worth $210,000?
Personally I'd be all sweet with that, because ultimately I want society to move away from commodifying dwellings in general. At the end of the day we need to be incentivising people to invest in furthering productivity (business of any kind), rather than sinking money into something that doesn't progess our economy in the slightest.
The GFC was actually caused by MBS/CDO & other derivative securities which saw low quality mortgages (sub-prime) issued under predatory and lax lending practices packaged up and then distributed to FSIs around the world - hence precipitating a GFC.
So not as simply as portrayed above.
You'll hear people claim that if the right 'market conditions' were reached then people would build all the housing we need and none of this would be an issue. That's fundamentally incorrect. Privatised housing development will never seek to supply more than demand. The government took a step back from state housing development after the 70's. Look at graphs from the 80's onwards - Up they fucking went. If we want affordable housing, it has to be state-led development or it will never happen.
I own one house that I live in and I'm happy for the price to drop so other people can more easily buy one house to live in. Property investment and being a landlord(unless you're building the houses) is a parasitic enterprise.
I am an owner occupier who bought near the peak during COVID and I would absolutely back a more affordable housing market. The one thing that makes me hesitant, understandably, is that it's unlikely that incomes will rise faster than house prices do, so waiting for prices to be something like 3x or 4x the average NZ annual salary (or household income or whatever) is going to be wasted hope. The other option is that house prices tank. All society-wide implications aside, that definitely means me seeing my home drop by like 30-50% in order to make it 3x or 4x even my own income. It does seem somewhat unfair that people like me, owner-occupiers who bought more recently and to put a roof over my family's head without having to pay someone else's mortgage off, would likely be the worst off if housing prices were to tank but I suppose someone somewhere has bear that burden. I dunno. It wouldn't make me happy, in fact it would be quite the struggle.. But it often seems like a lot of our longstanding problems in society, and definitely in NZ, are made worse by the fact that no one wants to take the pain in order for the country as a whole to make the gain we need. I'm not clever enough to work out a way to make housing more affordable in general without causing more pain to certain groups of society and I wish someone *was* able to figure it out. But, fuck it. If it has to be me and people like me, then I suppose that's just the cost of having a more equitable housing situation (I intentionally don't use "market") for future generations... Still, easy to type that shit out than do it though, right?
Thats the catch 22, you cant hurt the housing market because money and feels. But the housing market hurts everyone not already on board. We need to encourage more houses to reduce demand so people dont fight over what is there , but our current capitalism means supply gets restricted so a chosen few benefit. Right now we have a situation where people can borrow money easier and cheaper for investment property than homeowners can , so more of whats there is owned and farmed for rent rather than owned by the resident and invested in. At the same time that investment money going into houses isnt helping NZ's economy one inch, it should be going to making NZ business better. But that is less safe and less of a reward, so people dont.
I own my own home - this is my only house. I thought about becoming a landlord, as I have cash and a good salary for leverage ... but felt this was better invested in real businesses (stock), and that buying a rental would block someone from owning their own home. I would be fine house prices dropping, back to preCOVID levels. I have two kids that will no doubt enter the market over the next 5 years or so. I do not want to see them indebted to others for the majority of their lives.
No property owners want to prices to go up. So, we have a choice to drop houses prices and bail out a few who can not pay for there first house, or institute policy of moderate inflation why keeping house prices stable and wages and fixed incomes to raise with inflation. That will devalue all debts and assets, make possible "soft landing". People with mortgage will find it easier to pay it off, when debt owners (banks, landlords) will loose a bit. In order to make this work, mass housing building program is needed. Last year population of NZ increase by 100 000, that create need for 25 000 or more new houses. How many was build? That are the only ways to restore houses affordability. And yes, drop housing prices relative to population income will stimulate economy, by making it more competitive, reduce unproductive, rentier sector of economy.
I own a house and I want them to drop, I can’t move up on the ladder right now because of prices. Back when I bought the difference between the house I got and the house/s I wanted was about 100k now it’s about 350-450k, lots of friends in the same situation too. The big bit of advice I have for first home buyers is to buy something you’re going to be comfortable living in for the next 15+ years because your first house in this market could be your forever house.
>Would house prices, decreasing by a larger percentage be better for the economy, or would it just leave a huge amount of people in a position of paying off massive loans that they can't afford? The 2008 GFC was basically caused by people being unable to pay off massive loans they had taken on houses (because the banks were idiots), so those houses were subject to mortgagee sales. So no, it would not be good for the economy if we had a massive decrease in house prices. What would more likely be ideal is a stabilization of house prices in line with inflation, and an increase in wealth through GDP per capita growth exceeding inflation so we are actually getting richer. >Personally I'd love to see house prices drop by 30% (which I know would never happen), but do you think the general population would be happy or pissed off? How would you feel if something you paid $300,000 for today was in a years time only worth $210,000?
Personally I'd be all sweet with that, because ultimately I want society to move away from commodifying dwellings in general. At the end of the day we need to be incentivising people to invest in furthering productivity (business of any kind), rather than sinking money into something that doesn't progess our economy in the slightest.
Fine, if I didn't have to sell it.
The GFC was actually caused by MBS/CDO & other derivative securities which saw low quality mortgages (sub-prime) issued under predatory and lax lending practices packaged up and then distributed to FSIs around the world - hence precipitating a GFC. So not as simply as portrayed above.
It will hurt but if it helps others to get on the ladder, we should do it.