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.
Hello! This post couldn’t be written any better!
Reading this post reminds me of my good old room mate! He always
kept chatting about this. I will forward this post to him.
Pretty sure he will have a good read. Thank you for sharing!
Also visit my web page … mitolyn supplement
As individuals age, joint health often becomes a pressing concern, leading to the
quest for effective supplements that can maintain or improve
Flexorol Joint Pain function and alleviate pain.
This was a fantastic read. Check out https://maps.app.goo.gl/YjCwKdMNNg7SjBTV7 for more
wikibank.kz https://wikibank.kz .
Thanks for the informative content. More at https://integrisroofing.com/
I loved as much as you will receive carried out right here.
The sketch is attractive, your authored material stylish.
nonetheless, you command get bought an edginess over that you
wish be delivering the following. unwell unquestionably come more formerly again as exactly the same nearly a lot often inside case you shield this increase.
Our life size real looking sex dolls are equipped with good quality?? ?? stainless-steel skeleton,
Thanks for the insightful write-up. More like this at https://maps.app.goo.gl/7BT4hLmnRFKvK1TP6
Appreciate the insightful article. Find more at payday loans bad credit
SO. The following probably doesn’t sound equivalent,
but also my daily life knowledge is legitimate. I am a Prenatal
Massage practitioner. I see numerous individuals every single
work day and help the entire group to enjoy a much less taxing, a great deal
more pleasurable, and much less symptomatic pregnancy.
Every single individual presents with different challenges.
massage during pregnancy tackles this particular, although being a consultant I need to always
be adaptive and keen to research the way to best help.
Truth be told there is certainly no scenario when a
one method may benefit most people. Which is
my situation, yet unfortunately my personal way of explaining could be uncertain.
Serious pain in the lower back is absolutely not all the details that a mother-to-be deals with.
In the same way, simply no class of folks ever experience hardships in the same manner, and so to
assist the group, LMTs really should come to be effective listeners.
Skup nieruchomo?ci to idealna opcja dla tych, którzy potrzebuj? natychmiastowej gotówki za swoj? nieruchomo??. Dzi?ki temu procesowi mo?na unikn?? d?ugotrwa?ych formalno?ci zwi?zanych z tradycyjn? sprzeda?? skup nieruchomo?ci warszawa
Have you ever attended a buffet at an Indian restaurant? It’s such a great way to try multiple dishes! indian restaurant near me
I always recommend Javis Towing and Transport for anyone needing roadside assistance in Orlando professional towing service
If you’re skeptical about chiropractic care Everett Chiropractor
Fabulous, what a weblog it is! This blog gives useful information to
us, keep it up.
My web-site – HVAC Contractor Leads
Spot on with this write-up, I truly believe that this site needs a great deal more attention. I’ll probably be returning to read through more, thanks for the info!
If you’re experiencing inconsistent heating or strange noises from your furnace, it might be time for a replacement. Don’t wait until it’s too late! Check out Puyallup HVAC installation for expert advice and tips on making the right choice
I know this if off topic but I’m looking into starting my own weblog and was curious
what all is needed to get set up? I’m assuming having a blog like yours would cost a
pretty penny? I’m not very web smart so I’m not 100% certain. Any tips or advice would
be greatly appreciated. Thank you
Join millions of players worldwide in our epic online game. Hawkplay
??? ?????????? ?????????? ???????, ??? ?? ?????? ?????????? — ??????, ?????? ??? ????, ??????? ?????? ?????????? ??? ???? ?????? ?? ?????????? ???????? ??????????? ?????? ? ????? ??????????
Thanks for the practical tips. More at installing hardwood floors
Today, I went to the beach front with my kids. I found a sea shell and gave it to my 4 year
old daughter and said “You can hear the ocean if you put this to your ear.” She
put the shell to her ear and screamed. There was a hermit crab inside
and it pinched her ear. She never wants to go back! LoL I know this is totally off topic but I had to tell
someone!
???????????? ??? ?? ????? ???-?????!
????? ?? ??????? ??? ??????????? ???
????????? ?????????? ?????? ?????????.
?? ?????????? ??????? ?????? ?????????? ?????????, ??????? ??????? ??? ??????? ????? ????? ? ?????????? ???????????? ? ???????.
? ????? ???????????? ???????????? ????????? ???? ?????????? ?????????, ??????????,
???????????, ??????? ? ?????? ??????.
?? ????????? ????????? ???? ???? ??????, ????? ?? ??????
???? ? ????? ????????? ????????? ? ?????????
?? ?????????? ?????.
???? ??????????? ??????? ??? ??????? ???????? ?????????? ???????, ???????? ???? ?????????????? ??????????? ? ????????????.
?? ????????????? ???????????? ? ????????????, ????? ?? ????? ??????? ???????????? ??????? ? ???????? ????????? ??????.
?? ???????? ??????????? ??????????????? ??????
???????? ? ???????? ??? ???? ??? ?????????? ????????????!
???????? ?? ??? ????, ????????????
? ????????? ????????? ? ??????? ????
???? ? ?????????? ???????????? ????? ??????!
???? ?? ????? ?????????????
Thanks for your marvelous posting! I definitely enjoyed reading it, you
are a great author.I will always bookmark your blog and will eventually
come back very soon. I want to encourage continue your great work, have a nice morning!
Also visit my blog; Kauwstaven voor honden
Has anyone used abm window cleaning for commercial pressure washing? I’m curious about their services for businesses
Nicely detailed. Discover more at abogados en Vigo
Sweet blog! I found it while browsing on Yahoo News. Do you have any tips on how to get listed in Yahoo News?
I’ve been trying for a while but I never seem
to get there! Cheers
Also visit my site; ?? ????
Does your site have a contact page? I’m having trouble locating it but, I’d like to send you an email.
I’ve got some ideas for your blog you might be interested in hearing.
Either way, great website and I look forward to
seeing it develop over time.
my homepage … HVAC Contractor Leads
The welcome bonuses are so generous these days; they really enhance the gaming experience! Check out what’s available at okbet
Every article by H.Hofmeister & Co Hofmeister Plumbing
Hello! I know this is kind of off topic but I was wondering which blog platform are you using for this website?
I’m getting fed up of WordPress because I’ve
had problems with hackers and I’m looking at alternatives for
another platform. I would be awesome if you could point me in the direction of a good platform.
Feel free to visit my blog post ??????
This article has motivated me to schedule my next dentist appointment delft tandartspraktijk
This is quite enlightening. Check out Curbside Junk Removal for more
Fantastic article on the steps involved in a full roof replacement process—I feel much better informed now! Check out roofer near me
Does anyone know if there are any financing options for big licensed roofing contractors near me
Great breakdown regarding customer loyalty programs—they can foster long-term relationships—I encourage everyone interested to connect via services offered by ### anykeyword best digital marketing agencies
CoolSculpting is a breakthrough procedure that can help you achieve the body shape you desire without surgery American Laser Med Spa – Lubbock
kassyrznfilarmonia.ru – ???????? ????? ?? ????? ?????.
Are you tired of hiding behind loose clothing? CoolSculpting in Amarillo offered by coolsculpting near me can help you achieve the body confidence you deserve
Sekarang scammer suka pake cara-cara kreatif, termasuk
buat link yang keliatannya asli. Jadi pastikan link aman dulu sebelum kasih data pribadi.
Using a reputable supplier like bulk food wholesaler gives me peace of mind regarding food safety
Wow American Laser Med Spa – Midland
I read this article completely regarding the resemblance of hottest and previous technologies, it’s amazing article.
Heya this is kind of of off topic but I was wondering if blogs use WYSIWYG editors or
if you have to manually code with HTML. I’m starting
a blog soon but have no coding know-how so I wanted
to get guidance from someone with experience. Any help would be enormously appreciated!
my page: ?? ???? ???
This was a great article. Check out Iron Rod Gun Dogz for more
If you’re in the Everett area, definitely check out an ##Everett Chiropractor##. They have amazing techniques for spinal adjustments Everett Car accident chiropractor
T?i ngay app Hitclub ?? tr?i nghi?m nh?ng giây phút gi?i trí tuy?t v?i nào! ##Hit hit club
I’d like to thank you for the efforts you have put in writing this site.
I am hoping to check out the same high-grade content from you later
on as well. In truth, your creative writing abilities has
inspired me to get my own website now 😉
my web site: ???????
Wow, that’s what I was exploring for, what a material!
present here at this web site, thanks admin of this web site.
”Hope this encourages readers feeling hesitant reaching out seek assistance concerning matters discussed earlier—it definitely pays off tenfold ultimately when done right!!” ###keyword### local emergency towing services