I’ve been on a bit of financial planning binge over the last several months. This was prompted by a bunch of books I’ve been reading including the books from the ‘Rich Dad, Poor Dad‘ series and a bunch of investment books (including shares, bonds and property).
Meanwhile there has been a house price spike in Auckland, New Zealand as can be seen from the tail end of the graph below (data from Barfoot & Thompson).
Interestingly, during this period, total returns are 21% or 4.2% per annum. Adjust that for inflation and you got a 1.8% return on your investment, hardly amazing. But that’s a subject for another post.
Back in 2005 when we bought our current house (a 3 bedroom house on a small section on Auckland’s North Shore) we were able to get it with a mortgage of about 3.5 times our combined income. We then went overseas for a couple of years and came back ready to have our first child. Fortunately, my income had increased, so we could still afford our mortgage (3.7 times income).
These days, with two growing pre-schoolers, a wife who’s just finished studying and is returning to work our mortgage is a very healthy 2.3 times income.
Here’s the issue, like many of our peers (and generations before us) we’re now growing out of our 3 bedroom house on a cross leased section.
In previous generations they may have just added an extension (not possible with so little land) or simply moved to another house with only a marginal increase in their mortgage.
Even though our house price has to some extent kept up with house price increases, acquiring a four bedroom house on a full section in our neighbourhood would require us to increase our mortgage by 82%.
This would mean our mortgage was now 4.3 times earnings, without the likelihood of the dramatic salary increases possible in the earlier years of your career. [Note, this site suggests 2 – 2.5 times gross earnings].
So what am I saying?
There’s a lot written about housing affordability and the fact that people can’t afford a first home. I’m looking on one step further, even if you can afford a small first home, based on two incomes, what future can you look forward to when kids come along and you eventually need a bigger place?
The answer is pretty clear to me, either:
- A lot more middle class New Zealand families will be renting their homes in the future (maybe from overseas residents (again a topic for another post))
- A lot more middle class families will be forced to live outside Auckland
- There will be a major correction in house prices as people refuse to pay the unaffordable prices
- Many families will undertake a massive (possibly unsustainable) debt burden that will negatively influence their entire life.
The last point is the one I worry about. What does a society look like where families are toiling under the pressure of their massive mortgages? Unable to take holidays, struggling to put food on the table, unable to even think about supporting their community (either financially or in time)?
That’s why, I would encourage my peers and those just starting out their adult life to seriously think whether the traditional aspiration of house ownership is still relevant.
I urge you stay away from this platform. My own encounter with it has been purely disappointment along with concerns regarding fraudulent activities. Be extremely cautious, or even better, find a trustworthy platform for your needs.
WOW just what I was looking for. Came here by searching for live sabong bet
Hello, I enjoy reading through your article. I wanted to write a little comment to support you.
I strongly recommend stay away from this platform. The experience I had with it has been purely frustration and doubts about scamming practices. Be extremely cautious, or even better, look for an honest platform to fulfill your requirements.
https://doxycyclinea.online/# where to get doxycycline
Hello to every body, it’s my first pay a quick visit of this web site; this weblog consists of amazing and
genuinely excellent material designed for readers.
Your style is unique compared to other folks I’ve read stuff
from. Many thanks for posting when you have the opportunity,
Guess I will just bookmardk this weeb site.
my page :: Prabowo dan purnawirawan TNI
It’s an awesome paragraph for all the internet visitors; they will get benefit from it I am sure.
Great delivery. Great arguments. Keep up the amazing effort.
E?eryone ?oves it when people come tog?ther and share ideas.
Great site, continue the good ?ork!
Feel free to visit my webpage :: blocked drains northampton
Everything is very open with a clear clarification of the
issues. It was definitely informative. Your website is very useful.
Many thanks for sharing!
https://irongamers.ru/sale/
It’s ver? trouble-free to find out any matgter on web as compared to books,
as I found this post at this wweb page.
Feel free to ?isit my web-site Túi xách công s? n?
Hmm it looks like your website ate my first comment (it was
super long) so I guess I’ll just sum it up what I submitted and say, I’m thoroughly enjoying your blog.
I too am an aspiring blog blogger but I’m still new to the whole thing.
Do you have any helpful hints for novice blog writers?
I’d certainly appreciate it.
Thanks designed for sharing such a pleasant opinion, paragraph is fastidious, thats why i have read it entirely
Greetings! Very useful advice within this article!
It is the little changes which will make the greatest changes.
Many thanks for sharing!
ig???
H?wdy would you m?nd stating wh?ch blog platform yo?’re using?
I’m going to start my own blog in the near future ?ut I’m having a dificult time deciding between Bl?gEngine/Wordpress/B2?volution and Drupal.
The ?eason I ask is because ?our de?ign seem? different then most ?logs
and I’m looking for som?thing compl?tel? unique.
P.S Apologi?s for being off-topic but I had
to ask! https://biowiki.clinomics.com/index.php/Permainan_Slot_Togel_Yang_Intinya_Dalam_Bahasa_Hindi_Kamus_Umum_Bahasa_Inggris_Ke_Bahasa_Hindi
payday loan
Hello, i think that i noticed you visited my blog
thus i got here to go back the choose?.I am trying to in finding things to improve my site!I assume its good enough to
make use of a few of your ideas!!
Excellent blog! Do you have any tips and hints for aspiring writers?
I’m hoping to start my own blog soon but I’m a little lost on everything.
Would you suggest starting with a free platform like WordPress or go for a paid option? There are so many options out there that I’m totally confused ..
Any tips? Bless you!
Greetings! This is my first visit to your blog! We are a collection of volunteers and starting a new project in a community in the same niche.
Your blog provided us beneficial information to work on. You have done a outstanding job!
Hey! Do you know if they make any plugins to protect against hackers?
I’m kinda paranoid about losing everything I’ve worked hard
on. Any tips?
Thanks very nice blog!
??????
Hey very nice blog!! Man .. Excellent .. Superb ..
I will bookmark your web site and take the feeds also?
I’m glad to find so many helpful info here within the submit,
we want develop more techniques in this regard, thank you for sharing.
. . . . .
????? ????As the daffodils bloom,the birds chirp,
Great article! This is the type of information that should be
shared around the net. Disgrace on the seek engines for not positioning
this post higher! Come on over and talk over with my web site .
Thanks =)
I am really impressed with your wriiting skills and also
with thee layout to your weblog. Is that this a paid topic or
did you modify it your self? Anyway keep up the excellent hith quality writing,
it’s rare to peer a great weblog like this one these days..
Here is my web page :: Vehicle Gate Access Control Systems
Excellent web site you’ve got here.. It’s difficult to find quality writing like yours these days.
I truly appreciate individuals like you!
Take care!!
https://roommx.com/
Greetings! Very helpful advice in this particular article!
It’s the little changes which will make the most significant changes.
Many thanks for sharing!
??? ?????
Examine our most up-to-date assortment that includes this revolutionary substance dolls and feel the real ??? ??difference for yourself. As normally, we’re dedicated to supplying you with the ideal in both solution and repair.
I love looking through an article that will make people think.
Also, manyy thanks for allowing me to comment!
??? ??? ???
I highly advise to avoid this platform. My own encounter with it has been purely dismay along with concerns regarding scamming practices. Proceed with extreme caution, or better yet, seek out a more reputable platform to meet your needs.
Its like you read my mind! You seem to know a lot about this, like you
wrote the book in it or something. I think that you can do with a few pics
to drive the message home a bit, but other than that, this
is great blog. An excellent read. I will certainly be back.
I strongly recommend to avoid this site. My personal experience with it was nothing but frustration as well as suspicion of fraudulent activities. Be extremely cautious, or better yet, seek out an honest platform to meet your needs.
???????? ? ????????????? https://newflatekb.ru/ ?????? ?? ???????????? ???????????
Hi! Do you know if they make any plugins to safeguard against hackers?
I’m kinda paranoid about losing everything I’ve worked hard on. Any suggestions?
??????? ???????? ???? ??????????? ????????? ? ????????????? ??? ??????????? ????? ????? ?????? ? ??????? ?? ??????????. ??????????? ????????? ????????, ?????????? ? ????????????? ?????? ? ??????? ?? ????? ?????????. ????????? ?? ????? https://serialy-na-angliiskom.pp.ua. ?????? ? ??????? ?? ?????????? ?? ?????? ??????? ??? ????????? ????????? ?????, ?? ? ??????? ????????? ?????????? ????? ?? ????. ??????????? ????????? ???????? ?? ?????????? ? ???????? ?????????????? ?????? ????????.
https://amoxila.pro/# buy amoxicillin 500mg online
We are a group of volunteers and starting a new scheme in our
community. Your website provided us with valuable info
to work on. You’ve done a formidable job and our entire community will be thankful to you.
There’s definately a lot to know about this topic.
I like all the points you’ve made.
The Writing is like a lighthouse for my curiosity, guiding me through the fog of information.
The perspective is incredibly valuable to me. Thanks for opening my eyes to new ideas.
I quite like reading a post that will make men and women think.
Also, many thanks for allowing for me to comment!
You’ve done a fantastic job of breaking down this topic, like unlocking a door to a secret garden. Intrigued to explore more.
Brilliant writing! You’ve perfectly captured the essence of the topic.
Reading The post was like going on a first date with my mind. Excited for the next rendezvous.
You weave words with the skill of a master tailor, crafting pieces that fit the mind perfectly.
Delightful read. The passion is visible, or at least, very well faked.