Cost of living comparisons

[Flyingkiwi]

offering low or no deposit with reduced repayments for 1 or 2 years.
then when costs move a bit it blows the homeowners budgets to bits = Empty house.
Or the reality that they can't afford what they bought. the developers ok he got his money and will do it again.

We have had 14 finance companies close this year, and still you can go to a major appliance chain and get interest free credit untill 2011. Now thats just nuts really. most of the stuff they sell you can get for half price with cash.

Our reserve bank keeps pushing our interest rate up to try and stall the housing market, but it just keeps going up in value.
there is always a demand for houses, people have to live somewhere. there are only so many bridges and parks to sleep in.

Yep we have our homeless as well, mostly in the main centers like Auckland, Wellington.
I think the average house in Auckland is now over $500K.

increase in fuel costs are finally starting to come thru to push the price of food up on average 50 cents an item min.

[Texas Mack]

Originally Posted by EasilyAmused

40,000k a year and even be able to own a home? Much less one worth 360,000? Are you missing a zero?
Usually some one living in a 360,000 house is making over 100,000 in salary. Then you want to add an investment property, Three kids and FOUR cars???



Basics
360,000 home = approx. 8,000+/- a year in property and school tax
250,000 investment property= approx. 5,500+/- in property and school tax
Homeowners insurance= approx 2,500 a year
Insuring 4 cars= approx. 2,000-3,000 a year depending on who's driving
Gasing said cars- 500 a month if you NEVER drove anywhere or 6,000 a year.
Health insurance=1,000 a month or 12,000 a year
Feeding a family of five= a minimum of 1,000-2,000 per month or approx. 18,000 a year
Dog and vet bills= 500 a year
Electricity=3,500 and up a year
Water= 2,000 and up a year
Federal income Taxes would average about 28% or higher for anyone who could afford the above.

I generally like your breakdown but I'll go ahead and say that I think your family grocery bill per month is a little overstated. Maybe by about $300 - $500.

[chris_ut]

While there were many factors that contributed to the current sub-prime mess, the Fed's artificially low interest rates started the whole bubble in the first place, and their willingness to bail out all the banks with free money means that nothing is going to change because of it.


Flyingkiwi,

Do you have restrictions on development there in NZ? Typically if housing prices continue to rise despite high interest rates than the culprit is usually artificial scarcity of housing caused by government interference in the market by limiting development.

[Flyingkiwi]

Lots of developing going on at present, the market has slowed down with less sales but mostly still with rising prices. Sellers still have high expectations, High labour and material costs push up new home prices which hold up resale values as well.

The next couple of years will be interesting, If our dollar drop then things will hit the wall big time.

Lots of foreign buyers with good money paying top dollar is part of the problem.

No capital gains tax is also an issue, buyers top up mortages in the hope of capital growth.

Real estate agents inflating prices to secure listings has been a major problem in pushing up prices.
Over here they appraise as well as sell. So they outbid other companies for the listing. heard of one where the Appraisals were $250K, $275K and $320K, guess whic one they listed with.

I thought seriously about putting an offer to the owner at $248K which I felt was market value. It's next door to my investment prop so I have a pretty good idea on what it's worth.

funny thing it's still on the market. I do hope they get $320K, that will lift the paper value of mine...LoL

Apparently 40,000 Kiwis moved to Australia last year with the veiw to staying there, Twice the money and halves the costs. We have looked at property there as well.

[travelguy_73]

Originally Posted by Flyingkiwi

We have had 14 finance companies close this year, and still you can go to a major appliance chain and get interest free credit untill 2011. Now thats just nuts really. most of the stuff they sell you can get for half price with cash.

No-interest financing has been popular in the States for a number of years at place like Best Buy and Circuit City (usually 12-36 0% mos). Like in NZ, there is a price difference built in to the appliance that acts as an effective interest rate, though it usually 10% or so, not a massive amount. As with other purchases, the effect is to get people to shop on the basis on what they can afford per month instead of what they really need.

[EasilyAmused]

Originally Posted by Texas Mack

I generally like your breakdown but I'll go ahead and say that I think your family grocery bill per month is a little overstated. Maybe by about $300 - $500.

Maybe so, but I'm a cook so I probably have a tendancy to buy more and more expensive ingredients. I don't even want to talk about what I spend on wine.

[Beto]

Let’s see Money, Politics and Religion very touchy subjects.

[Flyingkiwi]

Originally Posted by Beto

Let’s see Money, Politics and Religion very touchy subjects.

touchy subjects are good, thats when people show their true colors and start to be honest in their comments...LOL