Written By: - Date published: 7:57 am, December 1st, 2016 - 14 comments
Categories: capitalism, class war, housing, uncategorized - Tags: economic growth, housing, housing affordability, housing crisis, im/migration, interest rates
Hey first time home buyers – National has a warning for you:
Don’t take on too much debt, govt warns homeowners
The government is again warning first home buyers to be careful and not to take on too much debt.
That shrieking sound you hear is the bitter laughter of first home buyers. They know all about debt. They know that our houses are the least affordable in the world. Of course they know that if they are lucky enough to find a place somewhere, then the debt is going to be too high.
The latest caution comes as new Reserve Bank figures show the average loan for a first home has surged 43 percent in just the last two years.
In October 2014, the average loan for a first home was just over $270,000 – last month it hit $390,000.
And interest rates have started rising again.
The Reserve Bank is getting on board with the warnings too:
Huge mortgage-to-income discrepancies prompt warning from Reserve Bank
The amount of money being borrowed to buy houses at five and six times a person’s income has grown significantly in the last two years – a move which the Reserve Bank says could threaten the resilience of New Zealand’s banks.
Won’t somebody think of the banks!
Despite a slow-down in Auckland property price growth in the last six months the bank said the vulnerabilities in the housing market had increased.
“Despite some recent softening, house price growth in Auckland remains high at 9.3 per cent in the year to October, and Auckland’s house price-to-income ratio, at 9.6, is among the highest in the world.”
Yes, in part because our incomes are too low.
So basically these warnings are telling the average first home buyer: “don’t do it, give up”.