Why are headlines like – Home ownership is falling - global trends and not concerning but access to housing standards and major housing problems in hot spots of the market people’s concern?
Are Housing Standards & Housing costs equally accessible?
Headlines—Home ownership is falling—are you concerned?
Headlines like this sound terrible but in fact New Zealand is following the global trends. Reasons are rather obvious if you consider technologies or changes in people’s lifestyle and social structures. Couples and single households are looking for comfort and flexibility when choosing a home or apartment. Professionals are making career choices based on income and lifestyle rather than being attached to a plot of land. I can relate to that as I left home early for career reasons too and have never regretted my decisions.
Young people want to live there where the actions are and following the trend of developed nations. Structural changes regarding jobs—also in NZ production lines have closed. With that in mind economies are no longer driven by what they produce and rather than are knowledge based and specialised in technologies and services. That requires an infrastructure for interconnecting people and businesses. Why would people move to Auckland willing to pay what ever it takes to get a home for rent or purchase a house in average for three quarters of one million Dollars?
Are housing costs equal?
Either you rent or own a home, in either way there are costs. Curiously New Zealander’s perception is that renting is "dead money". Only savvy renters see renting as an advantage for pursuing a well paid career, saving on living costs and cumulating cash for income producing investments or for a larger deposit when choosing home ownership.
Still many Kiwis are blindly thinking to create wealth by using home ownership with no or little money, signing huge home loans and waiting to sell with capital gain without having a clue what the real mortgages and holding costs really are. In many cases the capital gains do not offset the amount of losses due to payments for repairs and interest during the period of ownership.
Has everybody access to the same housing standards?
Interesting is that in countries with the lowest home ownership rates in Europe homeowners and renters alike have access to the same housing standards. In these countries like the Netherlands, Sweden, Switzerland and also Germany the government agencies, businesses and labour market work together to set policies, which are beneficial to the labour force, businesses, communities and parties involved.
To prove that the sceptical readers only need to compare the civil and tenancy law in these countries to understand how tenancies and home ownership are managed in contrast to England, Australia and also New Zealand.
Wishes and reality
At this time of the year filing the tax returns and preparing the budgets for the next financial year, I would like to be able to predict the future. Of course I am not more qualified or wiser than anybody else when it comes to predictions. But sharing my thoughts with you might help for your own considerations.
· I wish I owned a bank and could sell home loans for houses previously worth 200k, today with 400k mortgages to double my income with the same amount of work.
· I wish I owned the council and could increase the levies on a mouse click, well above inflation rates to satisfy my excessive spending habits.
· I wish I could sell house insurances based on online rebuilt-calculators to increase insurance premiums for homeowners on basis— take it or leave it. But actually there is not such choice because without insurance policy the house would not have EQCover from the government.
I could carry on with my wish-list, but at the end—if you do the right things, it will be okay. You might learn every day something, let me illustrate.
A little Landlord story
I got a urgent phone call from one of my tenants that the relative new dishwasher stopped working! Actually appliances need quite often repair—so I was quite surprised one day later when meeting with the appliance service, the technician said— Nah, not worth repairing it, buy a new one. So I paid for that advice $120 call out fee, labour... but bought a new one.
In the same months the under-bench oven needed repair. I had a look (you know how stoves sometimes look like) and thought—this time I’m clever, just bought a new one. I called an electrician for the installation because the power connectors were different. And also I need the compliance certificate for insurance cover (you never know). When I got the invoice, it knocked me off my feet – as the wire installation for oven and cook top were more expensive ($598.46 incl. GST) as the new oven itself. If you don’ t believe it look at the bill below:
Klauster Blogs lead to a real person, IT professional, investor, landlord and business owner with interests in technologies, properties and trading.
His passion, making experiences available and helping people like you, comes from extensive travelling and the principles of life—how to avoid pitfalls in unfamiliar territory when investing or forming relationships.
The philosophy to treat life, partnerships and hobbies as an investment has helped people in his circle. Life is a dream with a deadline, happiness comes from making the right choices and having realistic expectations.
Come along and share your views—learning from each other gives confidence
Changing Housing market -
People prefer to live where the actions are and job opportunities to choose from
Why is this a remarkable story?
Well, if you strive for property ownership as owner-occupier or investor you need always to be prepared and have some spare cash on hand to keep going. When managing assets you have got liabilities and obligations. That is often ignored, otherwise NZ’s housing stock would be in a better, healthier shape and house related diseases not so common.
But also this experience brings back my time as renter, living a life of luxury with low rent, remote controlled heating, air conditioning, long overseas holidays and free instant repairs by calling the landlord.
Well, today I am taking care of everything and hopefully by filing my tax return on time I make the taxman happy, too. Good luck.