Local kids can't buy house and is renting forever at unreasonable price. The world is not just about giving everyone the opportunity to become rich. Just making a decent living for most is a nice objective.

Why would they pay an unreasonable price? It's clearly reasonable for the person paying the rent.

> It's clearly reasonable for the person paying the rent

How so? They may not have an option to not pay it(as we're seeing happen in cities all over the world)

Definition of reasonable[https://www.merriam-webster.com/dictionary/reasonable]

1 a : being in accordance with reason - a reasonable theory

b : not extreme or excessive - reasonable requests

c : moderate, fair - a reasonable chance a reasonable price

d : inexpensive

Unless you live in a tiny country like singapore, you have a choice where to live.

Economic theory says that if the price is unreasonable, people won't pay it.

You have to live somewhere though, and in NZ cities rents are high enough that they prevent many renters from saving any money at all.

So, no, supply and demand theory kinda doesn't stack up when it comes to housing.

2 bed house, $310 a week, that's under half the minimum wage. That doesn't seem too extreme to me. That's for a two bed remember, so if you are a couple on median wage, you'll be earning $1800 a week pre tax, about $1500/week take home.

https://www.trademe.co.nz/property/residential-property-to-r...

Should be able to save $450 a week out of that. After 3 years that's $70k, a 20% deposit on https://www.realestate.co.nz/3341361, with a mortgage then costing about $330 a week.

The problem people who complain about house prices seem to have is that they want to live in very specific and desirable locations (Certain parts of Auckland for instance). There is a high demand for these locations, therefore price is high. But clearly the price is reasonable as people can afford to live there, otherwise they wouldn't pay the rent/mortgage.

When people stop paying high prices for rent in aukland, and instead live elsewhere, then companies in Aukland will have to either

1) Relocate to cheaper locations to attract staff

2) Pay staff more so staff can live in the area

It's the same the world over. You can buy a house in the UK half an hour out of two major cities for £125k. That's a £7k deposit (£44/week or £190/month for 3 years) and £550 a month after that.

If you can afford £600 a month for housing costs (£400 rent plus £200 deposit), you can rent for 3 years, then buy, within 35 minutes of Leeds and Manchester. Minimum wage is about £1200 a month after tax.

And hence live and crappy houses or very far away from work, good scools and social life.

You gotta pay back the investment/loan for the new expensive house price, and the rent will match it.

Local still needs to live somewhere

Local buys an equivalent house to the one they sold for $500k + transaction fees, which scale based on the price of the house

Local has less money than when they started

Not when the local is downsizieng from a 4 bed house and garden to a 2 bed apartment for retirement, or they simply die and it's local's kids that sell it.

There's a simple solution to avoiding buying in expensive locations though - buy in cheap locations.

So the local sells to a foreign buyer and downsizes. That’s great for them. But their kids are now priced out of the market, and will never own a home but rent from someone who lives 15h flight away.

Sure. Life sucks doesn't it

Fortunately there are many places that someone in NZ can buy a house.

https://www.realestate.co.nz/3379275

For example is proavly affordable on minimum wage of $32k, certainly with two incomes.

I’m not sure the point you’re trying to make here.

It’s a town of 1700 people, described by Wikipedia as a “gang town”. If your point is that it’s possible to buy a house in NZ, sure. But quality of life is totally a thing, no?

And even then, your example requires a $40k deposit while earning $32k, a salary which doesn’t appear to have a whole lot left over and the end of the week.

Local's kids gotta live somewhere too.

My understanding is that skyrocketing housing prices aren't much of a benefit to anyone who doesn't own more than one home. Because you always need to live in at least one place, your economic elasticity only kicks in when the number of homes you buy and sell is greater than one.

There aren’t any cheap locations. Fractionally less expensive, but still many multiples of a yearly wage.

You want somewhere that's affordable for 1x yearly wage? Care to point to some time in history that was possible?

Having New Zealand cities with average prices at 10x yearly average household income and a NZ average at over 6x is a radical departure from NZ’s historically narrow rich/poor divide.

https://www.interest.co.nz/property/house-price-income-multi...

https://www.google.co.nz/amp/s/amp.theguardian.com/commentis...

Christchurch is 4.87 times median income. New Plymouth 5.03. Hell parts of the capital are under 5x.

That's quite a normal multiplier in today's low interest and 2 income world (in parts of London the multipler is 38!)

What you're saying is that you can't afford to live in nice areas of Auckland. So don't.

Foreign buyer has to sell for significantly higher to profit..or just squat on it...not so great for local people looking for a house...