LukeandJo

We have totally put a hold on buying a house in the ever increasingly outer suburb of Auckland. Prices are ridiculous beyond belief.

We will probably never buy here at all...

davros1984

I also think prices will continue to rise. kiwis seem to want to put all of their money for life into houses as opposed to doing other things. I guess that's why most never leave the country or do much that isn't free.

i disagree on the ratios though. apparently the average job salary in Auckland on seek is 72,000. the average house price in Auckland is 785,000. so I make the ratio 10 times.

marblep

I have to agree with jmh. I grew up in central Auck (where my parents still live), we live in Pukekohe (approx 35 mins to my parents off peak). We have recently looked at selling here and buying in West Auck. For what we'd get for our 4 bedroom, 2 bathroom, 2 lounge house - we could buy a tiny little run-down hovel in Glen Eden. No thanks, I'd rather brave the traffic.

Stephen Jones

Jim

Where exactly is 'out your way'?

davros1984

I'm sure out of the way you can buy a house. Then you'll have to spend 1-2 hours commuting each way. Just getting from Birkdale to the city took 1 hour and 10 minutes this morning!

Charismatic

Probably true but it's based on household income (which, in my view, is folly since households are becoming smaller which stretches the ratio in itself) and the same was true in Ireland (with Dublin prices being a higher Price-to-Income).

My point is this bubble probably has further to run, except for the Kiwi and the mini-banks (Heartlands/SBS, whatever PSIS call themselves now etc.) the government and RBNZ have little to worry about. When this eventually goes tits up it'll be the Australians picking up the bill for bailouts. This isn't like the Icelandic bank fiasco because the base business in Australia dwarfs the size of New Zealand.

The only one thing they might have to look out for is if the Australian banks are in too deep they might decide to just scuttle their NZ units altogether. That said no depositors guarantee scheme means no liability so this is unlikely, more likely one night you will fall asleep with money in your savings account and the next morning you will be an involuntary bondholder (i.e. If things start to go south quickly make sure you move your funds to a bank without much Australiasian exposure before it goes all Cyprus).

davros1984

I received an email about 10 minutes ago about 2 properties near to me that sold over the weekend.

Hi Everyone - Just a quick update
The 'exciting weekend' turned into a highly 'successful weekend' with both my Auctions selling on Sunday.

27 Pupuke Road SOLD $921,500 - Under the hammer
65 Island Bay Road SOLD $810,000 - Under the hammer

Here's a link to my brand new listing launching today for those of you looking to get into the Westlake school zones. 4b Becroft Drive, Forrest Hill - 1st viewings this weekend Saturday & Sunday 1:00-1:30pm - hope to see you there. http://raywhite.co.nz/BHH20554

The agent confirmed:

65 Island Bay Road - CV was $490,000 - it sold for $810,000.
27 Pupuke Road - CV was $485,000 - it sold for $921,500

Madness!

sr71

To be fair I just did a quick search of the South East of the UK - in good areas for a similar property prices are pretty similar or more. Property is expensive anywhere in the world where people actually want to live (i.e the nicer areas)

And despite the gloom and doom, there are actually quite a few people in NZ on high salaries. A friend of mine is on $1400 per day as an IT consultant for example.

Assanah

I really don't think we need to worry about people with money.

MrsFychan

If people are going to pay these prices of course the market is going to stay high, until people say "no more" then nothing is going to change.

davros1984

the difference here though us that even in the less glam areas, its still crazy. Whereas the UK has incredible public transport options you can buy in many areas and have a reasonable chance of getting to work. I agree that a lot of the pretentious places in the UK have high prices, but its a country of over 62 million so that is to be expected. for me the real difference is in the entry level sector of the market for first time buyers and your average family.

I know I can buy a house in London for 250k gbp and have great transport options. here I have to spend 300k-400k+ GBP to buy a kiwi shed and then sit in traffic for up to 2 hours each way.

I do not know anyone who earns that sort of money in IT here. the best contracting rates I have seen are 600 a day.

sr71

Enterprise Architects, SAP, Enterprise level PM's etc.

$600 per day equates to a $135k salary, pretty low for contracting.

moonie2011

I went to an auction last week in Wellington, a property with a RV of $470k stopped at $430 and didn't sell, and another with RV of $540 sold for 545 with a lot of haggling, and no they were not kiwi sheds and were is a desirable area of Wellington!

davros1984

So in FTE terms, the best paid contractor I have met in 2 years is earning about $160,000 NZD a year.

I'm sure there will be a few who earn more than that, especially if they are doing something that is really in demand. Of course, in contracting you need to be earning that sort of money every day to have a chance of buying in AKL.

davros1984

Bang on - this is why I said in the Auck Vs WLG IT jobs thread, I advised on Wellington. Fairer cost of living in comparison to Auckland.

Thanks for letting me know r.e. those prices.