That's right, house prices go up in the surrounding areas. Means the money moves around.
This housing price thing is and always has been a huge beat up, I just don't get it.
For every person wanting to buy a house and pay as little as possible, there has to be someone wanting to sell their house for as much as possible.
What if evil mr chingchong was banned fro buying houses, huge disincentives were put on people to buy or own more than one property (oh, I hasten to add, saying evil mr chingchong was not me being racist, as I actually have no problems with the Chinese, but rather was poking the borax at those out there who seem to have an evident anti Asian bias, not necessarily anyone posting here either, I was being sarcastic), and marvel of marvels, house prices in Auckland did crash, all those million dollar house crashing to a decent affordable price of say half a million.
Hooray! All those young folks would again be able to buy their first homes! Yay!
But.....anyone of you Auckland guys who actually own your own homes at the moment, you have just lost half your equity. Banks, if you are under a mortgage, will foreclose on you as you will now be massively overexposed on your lending.
And if not over exposed in the lending, of course any hopes you had of selling your house in the long run to be able to afford to move somewhere nicer will be blitzed.
Imagine the screams then from the media, Pensioners destitute! Lifes savings wiped in house price collapse!
Is there any major national city in the civilised world where house prices are not skyrocketing? Sydney, Asia, Canada, Europe? Nope.
The main cause for the high prices and growth is the limited supply. That is the easiest problem to solve....get your bloody council to free up more land for housing. Then the problem will be solved.
How many here are looking with glee at their rocketing house value, thinking of their futures After They Sell Up? That is, of course, until your rates spike upwards due to the change in your house value, another thing that amazes me, that councils can charge more rates for absolutely no increase or improvement in services, it really is a back door capital gains tax applied to everyone before you even realise your capital gain!
Everyone demand Government magically fix this house price problem. A couple of years back, there were screams as people lost homes in a price drop because banks were lending almost 100% of house loans to young folks buying houses, so in response to this outcry, the govt decreed that buyers need at least ten percent equity before the can get a loan to buy, not just in Auckland, but anywhere in NZ.
That brainwave, to fix another media beat up, now means a lot of young couples simply cannot afford to get started on owning their own place. The unintended consequence of government interference in the process.
That is why I just do not like at all the idea of government being forced by populist politics to meddle in this area. For every winner, there will be a loser. The losers will be those who own their own properties now. ALL owners.
It is only my overwhelming natural humility that mars my perfection.
Captain Asparagus, Superhero, Adventurer.