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The received wisdom (or so it seems to me) is that NZ houses are more affordable than UK houses. Comments to that effect have been made on this article here Stuff.

Comparisons can be a bit tricky because UK stats tend to use the average whereas NZ stats use the (more relevant) median but to me it seems tolerably clear that UK houses are more affordable.

Price: UK average (at current exchange rates) NZD 500K, NZ median 371K

Interest rates: UK 2%, NZ +5%.

Family income: UK average NZD 84K, NZ median NZD62K.

I suspect that calculating using averages skews the results upwards. That is why, for example, London averages are so high: lots of Russian mafiosi, bankers and footballers live there - yet one can still get a very decent Victorian terraced house in a good area for less than GBP 300K - substantially less than the average for that city.

It probably skews up UK incomes as well, but I haven't found a median figure for them.

So: the average UK house price is just under 3 times average household income before tax.

By contrast, the median NZ house price is 6 (SIX) times median household income before tax.

Then there is the fact that interest rates are lower in the UK.

While I expect UK stamp duty pushes up the real cost of a house, it won't negate this difference.

I suppose value for money is perhaps even - depending on whether you want a large garden or something that will keep out the cold. However, my observation is that one can't get much of a garden in Auckland now - double-story dwellings and lack of infill housing mean one can get just as decent a garden in a UK city.

Not only that but outside the South, UK house prices are actually less than the NZ average (although I suspect more than NZ excluding Auckland).

In brief, a family coming from anywhere in the UK but London should be prepared.

Thoughts?

Catchafire

I bought a three bed house on a 900m2 section for $250k in 2006. I live in Marlborough.

You can still get a similar deal here today.

http://www.trademe.co.nz/property/re...-514117211.htm

Pom_Chch

We are looking at a property similar to the following:

http://www.trademe.co.nz/property/re...-553240397.htm

Good size, decent land, nice area, tidy inside, double garage and car port. Affordable too at $279,000, probably put in an offer of $270,000. Still affordable on a modest combined income.

There seems to be a big north/south divide and better value for money on south island.

lisamct

I live on the North Shore in Auckland. You'd be lucky to find a one bedroom apartment here for $270k.

I'm tentatively looking at buying property at the moment (on the Shore, through choice as I want to stay here, I accept there are cheaper place to live) and I'm budgeting on a minimum of $450k and even that wont be easy to find somewhere on that budget that doesn't need a lot of renovation.

Bo-Jangles

Honestly think you're fighting a losing battle if people can't get the picture it's not about the cost of the house, it's about affordability for the local poplulace trying to purchase a house for the first time, those earning Kiwi dollars and paying a mortgage from money they earn here and interest at the local going rates. It seems to me people are choosing to simply seeing it through the eyes of a cashed Poms with equity brought from overseas and simply seeing a cheaper price of house on the market.

Our Auckland house cost exactly the same as the three bed house we sold in the London Burbs and is a similar distance from the centre. If we were selling a UK house in anywhere else but London region there's absolutely no way could we ever have afforded to live in Auckland, end of. Quite frankly I don't know how people do manage it.

simonsi

That sentence alone shows the weakness of comparing averages.

EVERY immigrant should look at their earning potential in NZ, in the area they are interested in and then look at house prices there, or within a commute. That is, lets face it, the same process anyone sensible would take when looking at moving within the UK (or within any other country).

Frankly, I could say houses are much more "affordable" in the South Island than where I live on the Shore - but my earning potential is perhaps less than half that in Auckland so maybe less affordable in real life for me and not a risk I am willing to take...but that is an assessment I have to make, no averages vs medians is going to tell me that.

chocolate cake

Yeah, know what you mean At current rates my 3 bed house bought last year in Auckland cost 87% more than the one I sold in the UK, and that was before the worst of the slump in the UK market.

No doubt I could purchase a much much cheaper house in many areas of the NI besides the SI, but that ain't where the jobs are.

Assanah

Auckland houses are not affordable. It is really tough because Auckland's rents are also beyond good and bad. Other bigger towns in NZ are also very expensive. You will probably be able to buy cheap houses in the middle of nowhere....but then there are no jobs. 10 years ago was probably a good time to come but now it is too late.

Genesis

In relation to NZ wages versus NZ house prices I have been lead to believe by the press that NZ is a very, very expensive place to buy a house. They may seem cheaper than those in the UK when you look at the stand alone prices but when you look at median prices and median wages in NZ there is a very big gulf...ergo you will use more of your wages to pay for the mortgage.

whitesand

So true.

Synky

For info....Median salary is Glasgow is $42k and average house price is $310k. That's 7.3 times.

So it's crappy everywhere.

TommyLuck

To a point, I agree.

But there is no comparison for a $800k+ place in say Mount Eden, Grey Lynn, Western Springs, Pt Chev to anywhere in London, given the proximity of those locations to the rest of the city and the value of what you get for your money compared to £400k+.

So in truth, once you get to the 'above average' house price in Auckland, you're in a better position that you are in (loosely) comparative locations in the UK.

I realise that the majority of people are not in this position, certainly as ex pats. I just though it was interesting to note.

Bo-Jangles

There's also no comparison for the sturdy brick built house we left in the UK for the flimsy, blow away house we have in Auckland.

I have absolutely no doubt my UK house and all it's neighbouring properties will be still standing in thirty years time. I can't say the same for the one I am in now. I expect it has a lifespan of 30 years max and will have long since expired, been bowled and replaced or met its fate in some 'mysterious' house fire and get rebuilt from the proceeds of insurance.

Neighbouring 'chilly bin' style houses in our area that look like potential leakers (less than 15 years old) are forking out $150 to $200k for reclads.

simonsi

But in an earthquake your NZ house is far less likely to kill you than your UK brick and tile would be.

love30stm

people don't realise we don't have brick houses for that reason!!!