Over-valued houses mean nothing for prices: Alexander

Shouldn't we - as a nation - be thinking about doing something about increasing disposable income then? Why keep trying to bring house prices down. The former is progressive thinking, the latter regressive anyway.

Economists are not comparing like with like. We are not building enough cheap high rise apartment blocks that is why our data is skewed. They are comparing a 3 bedroom pigeon hole in Mumbai with a 3 bedroom on 500sqm in Auckland. That's why we are so expensive. But try buying that same 3 bedrooms on 500sqm in Mumbai and it will cost you millions of dollars. So how is $540k average prices in Auckland expensive?

Its quite simple maths: Supply vs demand. House prices will continue to rise because the cost of building is ridiculously over-inflated. Factor in things such as increased Council consent fee's, Watercare services massive infrastructure growth charge, the cost of third party inspections (because councils want to pass off liability), huge increases in building many materials partly due to an over-regulated building code (stainless anyone?) and in some areas you're up to $100k before you get the digger onsite. The developer certainly isn't going to eat this cost and if rented by an investor, they'll want to at least cover their costs... and we wonder why we have a housing shortage? No wonder so many are leaving in droves to Aussie...

Prices have moved rapidly. In Onehunga it’s tough to find a standalone place under $500k. This is one of the few. http://www.realestate.co.nz/1844968 The thing is that suburbs like this are trendy and considering Auckland's attraction as an international city still good value. Olive trees, fruit trees, a harbor view and a safe quiet area… Most people in first world countries would say that’s a good deal.. Prices aren’t bad when you put our lifestyle into the mix.