Young Aucklanders expecting to pay $700,000+ for first home

( Comment: If this item is correct the situation is even worse. If FHB struggle to find $700K they will have to rent. That presumes that investors can afford to buy houses at that level and rent them out profitably. If an investor borrows 80% = $560K @ say 4.25% = $23,800 p.a. or $457 per week plus rates, insurance. repairs, vacancies etc, so most likely it will end up at $700 per week all up.Then a profit on top will take the rent to a level that is way above median rents for the Auckland region. The only “profit” investors can possibly make is through capital gain which is useless unless the property is on sold with all the problems that brings ( tax, depreciation not recoverable etc). Furthermore capital gain is not guaranteed and is very likely to shrink dramatically in the not too distant future. We seem to be heading towards the perfect storm without a rudder or sails. Residential investors would do well to think again about alternative investment).
“Nearly half of young Aucklanders who hope to buy their first home expect to pay more than $700,000 – meaning they have to save at least $140,000 for a deposit.

Only 14 per cent of aspiring house-hunters believe they will be on the property ladder within two years and the same percentage don’t expect to own their own home until at least 2031.

The city’s biggest real-estate firm, Barfoot & Thompson, surveyed 500 Aucklanders aged 18 to 34 who were yet to own property about whether home ownership was achievable”.

link:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11608770

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