MrsFychan

$85k income not enough to buy house in much of NZ | Stuff.co.nz

" he said a single person earning $85,000, wanting to buy a house worth $650,000 with $65,000 deposit and no other debts or credit cards would probably be turned down by ASB, ANZ, BNZ and Westpac"

"it showed that two incomes were needed to buy in many areas around the country."

mrken30

Isn't this the same in over 50% of the Western world?

MrsFychan

as 85K is above average wages and NZ used to be known as having afforable housing the fact that over the last 5 years this has seen an incredible increase in cost of housing its worthwhile mentioning as some people may still believe it to be affordable.

garethwm

You can buy a house on $85k income. Youve got to come up with a bigger deposit than the $65k mentioned in the article though.

Pom_Chch

You can buy homes for far less than 650k though. Perhaps not in Auckland but at least in parts of Canterbury you can find good starter homes for 380-400k. Our first home here was certainly no where near 650k three years ago. And yes it's double glazed and insulated. Wages aren't that different to Auckland either.

Edit: Just looking on TradeMe in my local area and actually you can get a renno or small unit for 280/300k. There are options out there if on a low income or just starting out. There is life outside of Auckland people!

mrken30

I assume rents are also increasing in NZ like the rest of the world.

bearskin

It's quite a blinkered view to say what they do in that article. If you don't live in one of the bigger centres of population, prices are still affordable (on that income).

MrsFychan

Yes and an example, Rental crisis deepens as Mt Cook flat viewing attracts more than 40 people | Stuff.co.nz

and that was the first day listing.

the article states that Wellington is 350 properties short of requirement then and what with new people coming to the City every day its just going to get worse until something is put in place to accommodate the need.

MrsFychan

The point of the article is to show that it doesn't matter what salary you are on or really what deposit you have at the end of the day if you cannot show a certain amount of disposable income after all the bills are paid you won't even be considered for a mortgage.

Pom_Chch

This is nothing new though? When we bought our house the bank wanted a break down of our out-goings. Anything from credit cards, hire purchase, student loans, debts etc. All was taken into consideration when calculating how much we could borrow.

garethwm

I think its all to do with the size of the deposit though. If it was doubled to $130k, they should be fine for a mortgage on that income.

not2old

from a search of the NZ banks

"The first step in saving for a house deposit is to set a savings goal. Most lenders will require a minimum deposit for a home loan of at least 20% of the amount we are borrowing. So if buying a house worth $600,000 we'll need to save a deposit of at least $120,000"

or for those that qualify

https://www.newzealandnow.govt.nz/re.../buying-a-home

Loans for New Zealand residents

"The government has a number of schemes to help New Zealand citizens and permanent residents buy their first home. These include the Welcome Home Loan, FirstHome, and KiwiSaver first home deposit subsidy and savings withdrawal schemes"


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LoCarb

The government's policy is to encourage foreign students to study in Wellington and other NZ cities, but this is putting a huge burden on accommodation & housing for those already living here.

We need to ask the govt, why is this necessary?

Is it because we have to replace all that income we lost through asset sales to foreigners, so we now need the students to help with our balance-of-payments problem?

Good question

MrsFychan

yes but now it seems they have a set figure of what they require as a disposal income and I think it is a lot higher than it possibly used to be.

Charismatic

To be fair there has been little progress on improving housing affordability for years now. It should shock no one that we've ignored the problem and it's got worse.

Might be some temporary relief if bank funding costs push up interest rates and credit gets tighter (there has been a large slowdown in deposits among banks so they may not be in a position to offer credit) but that isn't solving the problem.