Opinion: Auckland the 'world's most laughable city'
I'm just dumbfounded.
The Government must think we're all idiots.
This is the latest from Housing Minister Nick Smith: Auckland's house prices are "out of control".
Just yesterday, he'd given this commitment: "I won't rest until that house price inflation rate gets down into single figures."
Minister, even assuming you can achieve that, you may have heard (along with every other person in the country) that average house prices in Auckland are now $ 1 million. Single figure inflation would still mean an extra $100,000 per year is acceptable. That's an extra $20,000 on a deposit. Every. Single. Year.
How is that going to bring things back under control?
"Based on my calculations, the typical Auckland house would take 71 years to buy – 20 years of savings and 51 years of repayments to clear the debt," according to economist Shamubeel Eaqub.
Well, that's just bloody fantastic.
The Kiwi dream of getting your very own house is now the dream of getting your very own house deposit.
Nick Smith wants to bring Auckland house prices back to four times household incomes, but somehow without reducing current house prices. As investigative genius Matt Nippert points out, household incomes would need to increase to $250,000 overnight.
The Minister's suggestion? Move to Wellington or Christchurch.
A few months ago my wife and I did just that, moving our little family to the capital. Partly it was for family reasons, but also that we had given up hope of ever buying in Auckland, you know, the place they call the world's most "liveable" city. Between us we have a pretty respectable household income. It wasn't enough.
We're in the middle of building a new house down here in tropical Wellington. Three bedrooms, double glazing, insulation, double garage, nice neighbourhood. All that for the same price as a two-bedroom unit in west Auckland, but it was still a stretch – finding that 20 percent deposit hurt.
But even Wellington has seen 17 percent price increases over the last year. Average prices in the wider region are now $536,000. I'm glad we got in when we did, but let's not fool ourselves, the stats are not a looking good for prospective buyers.
"The typical non-Auckland house was equivalent to 30 years' worth of savings and repayments for a typical family in the early 1990s. Today it is 45 years," says Eaqub.
The rest of the country is now feeling Auckland's pain.
Housing New Zealand is sitting on its hands. The special housing areas have been a joke. The Government's admitted they can do nothing to stop land-banking. The best advice is "buy an apartment". The next best advice is "wait".
Auckland: The world's most laughable city.