Cactus Kate on Affordable Housing

ŠĒ• Cactus Kate

In her usual inimitable way Cactus Kate explores the fallacy of ¬†“affordable housing”:

It is fashionable comments bait in New Zealand to write emotively about how there is ‚Äúintergenerational theft‚ÄĚ going on. I blame¬†Bernard Hickey for the ‚ÄúDear John/Ma/Pa‚ÄĚ movement¬†and his obsessional mumblings about ‚Äúhousing affordability‚ÄĚ. The newspaper editors sense impending circulation rises from those smart enough to read but not smart enough to think and have conjured it up for the benefit of their banking and real estate advertising clientele. It has spread like the winter flu to the usually very sensible and intelligent leading business journalist at the NZ Herald who has shamelessly jumped on the populist bandwagon with¬†some bait of her own.Hence time for me as probably the only commentator of the ‚Äúyounger‚ÄĚ generation X/Y/Z or whatever the term now is, who will call it as it is.

Nonsense.

And it is¬†nonsense¬†as she explains. She beleives the carping about “housing affordability” and “intergenerational¬†theft” is pecularly a white middle-class agst schtick:

The sorts shouting the loudest about ‚Äúhousing affordability‚ÄĚ and ‚Äúintergenerational theft‚ÄĚ tend to be white and middle class which is why they are getting some traction in the media. Poor people don‚Äôt complain so loudly about not owning their own home because they haven‚Äôt got enough money to pay rent, the taxpayer already pays that for them directly and as for ‚Äúintergenerational theft‚ÄĚ, their parents never had any money so if they do have the energy to whinge it is the staple stuff about government, nothing as complex as singling out old people, they are going for the wallets of everyone.

Yes ‚Äúhousing affordability‚ÄĚ and ‚Äúintergenerational theft‚ÄĚ is the domain of nice white middle classes who are peeved that they cannot afford where they think they should be able to with their income and are having to contemplate moving to where the poor people used to live.

And she compares the moaners to Matt McCarten and Hone Harawira…ouch. Cactus make the case for renting:

[R]enting is a perfectly reasonable and healthy activity, especially if you are female and never use the kitchen as you are in hot demand. As a direct result of never doing what other people are rushing to do, I have been renting despite being able to ‚Äúafford‚ÄĚ any house within reason that I wish, my entire working life. I can‚Äôt see any lobby group marching down Queen Street on my behalf because I am a renter so I don‚Äôt understand the leprosy type aversion New Zealand has to middle and lower classes and income earners renting. I do it, did it in New Zealand so they bloody well can as well. The way people carry on you think that owning a home was required to draw breath. People quote ‚Äúsecurity for their kids‚ÄĚ as a reason for owning their own home which is emotive garbage for ‚Äúcan‚Äôt be bothered moving all the time‚ÄĚ. I have not seen any evidence that children become insecure when they move home, on the contrary if it is to one nicer than the one they lived in before. Divorce and unhappy marriage provides far more insecurity, parents should perhaps focus on a happy home instead of what name is on the Deed of Title.

Bottom line is that most people who will never be able to afford their own home make bad tenants because they do not respect other people’s property, which is most of the reason they are poor in the first place and stay that way. Before the crying starts on this opinion, exhibit A in my defence is the Housing NZ stock. Want to live next to those tenants? The answer apparently is to make housing more affordable and give them taxpayer assistance so they can buy their own home. This makes as much logical sense as helping your eight year old buy their own iPad as a reward for damaging yours. No parent would do that so why should the taxpayer? Well some parents I know do, and the consequence is the kid keeps smashing up things.

Housing though is not unaffordable and she provide empirical evidence:

I overheard a friend mumble ‚Äúhousing is very affordable, I have thirty of them‚ÄĚ. He has a point. If housing was unaffordable there would be homes sitting now in New Zealand with no buyers capable of buying them before the market applied its mechanism for prices to drop. Seven thousand homes were sold in May 2012¬†on this measure alone.¬†Surely they were all affordable?

Affordability comes down to banks extending credit as most residential buyers need a mortgage. Cash or large deposit buyers effectively don’t bid for homes against other buyers they bid against the buyer and the bank. Any wonder house prices increase and lending does too?

The housing stats around the world she provides likewise make anyone who even utters the words “housing¬†affordability” simply look like ill-informed yokels from the back-blocks simply doing the bidding of likewise ill-informed editors of tabloid rags.

There surely can’t be a “crisis” with housing. How can it be when every city where white english people wish to live and 3rd world people wish to migrate to has a housing “crisis”?

If you want affordable housing try Invercargill.

It’s in an area of extreme social deprivation, extremely high unemployment, total lack of desirability.“…hence affordable…and now has Trevor Mallard as a Labour representative.

Oops I am sure Mallard has now made it even more affordable.

  • le sphincter

    I see one bank is offering 95% loans…learnt nothing. A real estate bubble …that will help the economy.

    I see some tossers  bought a place and did a quick do up then sold for a nice profit. $100k. As they are now renting they are finding it hard to find another place as they are snapped up.
    Selling to make a profit is taxable, so your details are on the way to IRD.

    • gazzaw

      Hope you sent Mallards details to the IRD too spink. Hate to think that he is making a non-taxable capital gain out of his regular Trade Me dealing.

    • CJA

      Only if they were stupid enough to tell anyone. The IRD may have a look at them, the onus of proof is on the tax payer but at times it is very hard to argue that was their intention unless it is specifically stated somewhere e.g. if you told your bank manager that.

      • le sphincter

        It was featured in the Herald

      • Bunswalla

        So it must be true! What a cock.

    • Johnbronkhorst

      As usual sphinky…you are wrong…the IRD uses a case by case basis to determine what is taxable. This case depends on circumstance. If they bought the house, lived in it, while doing it up. It is now their residence. If they sell it for a profit…they are NOT running a business ( of buying and selling) therefore it is NOT taxable. This could also apply if they rented it, as there businss would be landlord, not buying and selling. This however could change for a couple of reasons, 1 if they did neither rent or live in it while doing it up. or 2 they repeated the process soon after the sale. These 2 thing MAY cause the IRD to reclassify you as a business, selling houses and tax you accordingly!!

      • le sphincter

        Even a one off  is taxable. Its clear that they sold  and then rented SOLEY to make money. Running a business  , ie they probably have  other jobs, isnt required.
        It makes no  sense to do it like this unless the sole purpose is too make money.
        If its $10k  its hardly worth the money,  but $100k ? and  doing this well means they are likely to have a history  of buy , do up, then sell. Newbies arent usually this good first time.

      • Grizz30

        Whether it is taxable or not depends upon intent, which is very grey indeed. If these people lived in the property while doing it up, yeah I would say it is their primary residence so it is not taxable. If they did not, they are clearly in the property development business, so in this circumstance, the profit should be income and therefore taxable.

        However, whatever the circumstance, these people are not tossers for making a profit. Whether taxable or not, $100,000 is good income for a few months work and they should be congratulated. Only socialists frown upon this. I just ask that people follow the rules fairly.

      • In Vino Veritas

        It is only taxable schpinko if it was their intention to on sell at a profit. If they have a history of doing this, then of course the IRD will look closely at them. However, I know a couple that moved¬†6 times in two years, each time making a significant tax free capital gain. They were investigated by the IRD and didn’t have a case to answer, purely because when they bought each of the houses, there was no intention of selling.

      • Polishpride

        Not quite JBK it is the intention at the time of purchase. If you buy a house with the intention of doing it up to make a profit you run the risk of being taxed on it.
        This will of course be if IRD find out about it. If you do this as a one off chances are you’ll be fine and yes living in the house and amount of time living in the house will play a factor in you being able to argue that you didn’t buy the house to do up and sell at a profit.
        If you buy the house do it up and sell it in 6 months and IRD finds out, you run the risk of them wanting tax from the profit on the sale.    

      • Polishpride

        Sorry IVV should have scrolled down further and read your post – summed up nicely.

      • Polishpride

        whale feel free to delete my previous posts as IVV and Griz have already covered it

    • CJA

       And did they say they were buying it to make a profit? If so then they are stuffed (and also bloody stupid to boot).

    • In Vino Veritas

      Schpink, as always, you stand to be corrected. There has been talk of a real estate bubble for 30 years. And guess what? The trend has remained upwards, and there are still willing buyers.
      Just because the “tossers” bought and sold with a short turnaround, doesn’t make it automatically taxable. Read the Income Tax Act.

      On second thoughts, don’t. It will be beyond your comprehension.

      • le sphincter

        Yes it does. They are doing it to on sell and make a profit.
        For area manager Cameron Brewer of Onehunga, Auckland’s housing market has an apocalyptic feel to it.”It’s like the end of the world is coming and you’re going to miss out. You go to auctions and think you have a chance, and houses are selling much higher than expected.”With partner Aleisha Kerr, a flight attendant, they sold a property in Pleasant St, forcing them into the househunters’ dog-eat-dog world, an experience which has already made them feel shellshocked.In January, they bought a two-bedroom townhouse and embarked on a do-up, selling on June 24 for $430,000, making around $100,000 tax-free.In a fortnight, they will shift to a rental property and are hoping to be there for only a short time before they find the next do-up to live in.Now that the couple have sold, they are able to bid at auctions and hold a trump card: cash, unconditional.Find the next do up ? The IRD will be finding them first . It could be looking at a back tax bill as well.

      • CJA

        ¬†Okay I’m not saying you’re wrong but where does that statement say it was their intention to sell specifically? Or that they lived in it for a number of years while doing it up? Funnily enough I went to high school with Cameron.

      • le sphincter

        For me the selling it BEFORE they have found another, along with a history  of quick do ups  for resale is the killer.

        As well IRD is more focussed on this sort of thing these days. One of the best things English did, was get rid of the depreciation rort. As it was clear no one ever was paying back the depreciation when the property increased in value.

        WE have had the courts smack down the self employed¬†professionals¬†paying themselves nix- also loved the way ¬†they told that self important accountant ¬†Sherwin to ‘shut up’. Highly unusual ¬†for a court ¬†to tell a professional to STFU

        Anyway the online IRD ¬†‘tip line’ has all their details.¬†

        The other funny bit is he is described as an ‘area manager’. ¬†
        Bet he spends his bosses time looking at houses too as hes out on the road.
        Another please explain in order

      • In Vino Veritas

        Sounds like they are trying to find a house that is a bit run down (so they can get it cheaper)¬†and do it up to live in to me Schpink. There is no crime in that. And if someone comes along and makes them an offer they can’t refuse some months after completion of the do up, too bad (and it happen with some frequency these days).¬†¬†Tax free capital gain here we come.

      • CJA

        Again mate it looks as though you are skirting around the question instead of getting into specifics. “What was their intention?”. I refer to your first line “For me” so it is your opinion that they will get caught rather than looking at the facts of the situation. I would say they probably won’t be looked at too closely unless they do it again. Generally speaking you might get lucky and “get one for free” was a rule that was established quite some time ago. Also in relation to your comment on depreciation people actually do pay it back once the property is sold and it is called depreciation recovered. So for example a building is bought for $100,000 and depreciation for the building is $10,000 up until time of sale. The building is sold for $150,000 5 years later for example, the journal entry for your would be as follows Dr Bank $150k Cr Buildings $90K Cr Depreciation Recovered $10K and Cr Capital Gain $50k. So actually the tax payer does have the benefit of the $10k depreciation expense for a few years but once the building is sold the depreciation recovered is then returned as income.

      • le sphincter

        Dont give us that old chestnut about depreciation recovered.  The IRD have SAID as far as residential property goes it  almost never happened.
        And why would people do it, when the loophole meant they  could say the land had increased in value.

        The IRD  didnt come down in the last cabbage boat

      • CJA

        So your response is “don’t give me that”. Just to check your creditials on that are you an accountant? I realise you are only on this website to troll but at least come up with some sort of coherant argument (or is that a contradiction). Back in the day that was the trick to get a valuer to value the land and buildings so that the land had greatly increased in value and the buildings had coincidentally either decreased or was the same book value as in the financials. Doesn’t fly these days. What people are after is the capital gain and any tax incurred will come out for the proceeds of the gain. Just to check have you had any experience with this or have you spoken to some less than above board accountants.

      • Bunswalla

        Why are you even engaging with the faux-French tosseur? He clearly suffers from penis envy and deeply resents those with the gumption and means to better them selves in life, and now wants to run off and dob them in like the small, shallow mean-spirited nark that he is.

      • In Vino Veritas

        Now I call bullshit on your IRD saying as far as residential property goes they dont get depreciation recoverd. Firstly I have personally completed accounts and tax returns for mates who own rental properties. Whenever they have sold those properties and claimed depreciaiton over time, they have had that depreciation clawed back. Several have been investigated and had that checked specifically and come away clean. Its just the same as a business buying an asset and selling it for more than it’s depreciated value, its called a taxable gain on sale.

        Direct me to the IRD officer who said that Schpink, cos he can give my mates the tax effect of all that depreciation they accounted for back.

      • CJA

        Lol I find it fun and also means he leaves others alone.

    • CJA

      Just because it was featured in the Herald doesn’t actually mean anything unless they stated i.e. the taxpayers (please note I have not read the article, a link would be useful), that they bought the house to make a profit. There are numerous (which I’m not going to go into) parts of the Income Tax Act which covers the purchase and sale of land/property which the IRD will look at to see if the taxpayer should be paying tax on any sale of property. Sometimes these are simple and straight forward and sometimes they are not.

      • Sarrs

        Jeez…you shut sphink up pretty quickly! Well done sir!

      • CJA

        Hmmm think that might phyically impossible Sarrs but thanks for the compliment.

    • AnonWgtn

      In the USA the sub prime mortgage problem started by Clinton and the then Senator from Illinois, by law, making the major House Loan Companies (Freddie and Fanny), giving a mortgage to everybody, despite their inability to pay the mortgage. When Freddy and Fanny ran out of money they were told to go the Banks.
      Homebuyers here, who are currently getting cheap mortgages could be construed as unwise, as in time as world events change they will have to find more money to pay the mortgage.Unless they factor this in they could be in a problem in a few years.
      There are only 31% of houses in New Zealand with mortgages (say 600,000) over which the Banks are fighting.

  • Random66

    “This makes as much logical sense as helping your eight year old buy their own iPad as a reward for damaging yours.”

    Now that was funny :)

  • In Vino Veritas

    Cactus Kate, as always, hits nail on head. Brilliant

  • Dave

    Every generation the young say…. we will never be able to afford a house, parents say the poor kids, its the governments fault. ¬† REally -¬†

    Try Economics 101, Supply and Demand. ¬†Yano… ¬† ¬†Demand rises, prices go up, it causes some to GET OFF THIER ARSE and take the plunge into ownership.

    More buy homes, dry up supply of homes for sale, Prices rise as renting housing becomes available.   And on it goes.  Its cyclical, housing is very affordable at the moment.

    Catcus makes some good points, and Indeed, I agree Trev will manage to singlehandedly improve the prospects of home ownership in Invercargill.   

    Besides, check this beauty out: ¬† it’s not the cheapest home in Southland, but has all the amenities one could ever want, and could almost buy it on the American Express with a few Kina ¬†and Paua thrown in under customary rights: ¬†

    http://www.realestate.co.nz/1818127

    Don’t forget the dole and family benefits are almost the same in Remuera and regional southland…… ¬†its looking very affordable.

    • Johnbronkhorst

      I employed a young guy, 4.5 years ago for my previous employer. (I now work for myself). He still works there….Background!!……He said to me after working there 6 months “I’ll NEVER be able to afford a house…guess what…….YES you guessed didn’t you….he moves in next week!!! Good on him, I wish him all the luck and success!!

  • Guest2

    hell – where does anyone get off on telling me about housing affordability – I have worked all my life – saved hard for my deposit, brought my first house – loved it, sold it brought another one – sold it brought another one – first one was $159k my current one is worth $750k. all in the space of 12 years.
    And the last two were in the auckland market – go figure – affordability is what an individual wants to afford – not what any politician tells me – lets have car affordability, school affordability, wife and children affordability.

    I buy what I can afford – that is my index!!! and yes I am on $70k a year – go figure that index and have never missed a mortgage payment, never got one cent from my parents and had no major financial windfall.

    People should just stop worrying about money and enjoy life

    • In Vino Veritas

      jeepers Guest, dont say car, school, wife and children affordability, Labour will get some more whacko ideas. You can bet the Greenies are already thinking this way…..

    • Johnbronkhorst

      Working smart and hard…good no you!!!! You deserve everything you got!!!! Again congrats!!

  • Sarrs

    I suffered through reading the comments on both of the Herald articles. I think it’s just character building to have to struggle to make ends meet.

    People have to learn to live within their means – I mean for goodness sake, you can buy a reasonable house in Invercargill for $130k. On the basis of a house costing no more than 3 times your annual household income you’d only have to be earning around $44k a year. People have to be willing to sacrifice something for their home ownership dreams.¬†

    • Sarrs

      And just for everyone’s information – I rent because I live alone and don’t want to be lumbered with a mortgage if I suddenly decide to up sticks and move somewhere else.¬†

      High unemployment? HIGH UNEMPLOYMENT? That’s a joke right? Over 150 jobs on trademe right now. The only unemployed people in Southland are the ones who don’t want to work.¬†

      That article linked in the story is a bit misleading – only a mug would rent a 4 bedroom house in Appleby for $400/week. That’s criminal. I wouldn’t pay much over $300/week in a far nicer suburb.¬†

      • Johnbronkhorst

        Your life…your choice!!!…Funny how that is true about everything and everyone. You CAN choose to go to work and work hard or NOT….guess which one will make you rich!?

      • Dave

        I have run several companies with branches in Southland, there is a major problem there. ¬† Getting people skilled and people who want to work. ¬† ¬†It was a serious problem for us. ¬† In one of the companies I managed we could have doubled our operation in Invercargill, but we could not get enough staff who wanted to work or couldn’t work as they would turn up under the influence of the home grown weed.

        As a labourer, a lot of our people could earn 40 to 60K a year for working a 45 hour week.  (the extra hours were paid as overtime)  Sadly, most did not want to work the extra hours, there is a fantastic social culture in Southland, and they DONT generally need the extra income to pay their mortgages.    As one staff member said to me, mate, my mortgage payments are lower than your credit card bill.  He was right, his mortgage was under $500 a month.

      • Sarrs

        I’ve said it before – the unemployed people in Southland are simply the ones who don’t want to work. That’s why you only got muppets turning up. It’s a shame but it’s the truth.¬†

        Dave – if you ever find yourself in that situation again, try talking to Venture Southland. You could run a promo together and advertise your jobs nationally with Venture Southland picking up some of the tab and hammering home the lifestyle down here. Lord knows Venture Southland need to justify their existence somehow! I’m sure the government offers grants to people moving outside their home provinces for work (or they used to)¬†

      • Polishpride

        JBK its an old lesson but money doesn’t equal happiness. The sooner more people really get this the sooner we will have a better world. ¬†

      • Johnbronkhorst

        Really polish…how fo you? Untill you’ve tried both…wealth and poverty (real poverty)??? Basterdisation of dickens….”Income $1.50 out goings…$1.00 net result hapiness……Income $1.50 …outgoings….$2.00…net result misery”

      • Polishpride

        JBK your post explains far more about you than you probably realise.
         

      • Sarrs

        Money may not equate to happiness but a lack of money sure can cause misery, stress and¬†aggravation. I’m not 100% happy with my life even though I have enough money to service my needs but I know that I’d be far less happy if I had to scrape every week just buy food and pay the rent. Maybe money can go some way to alleviating misery but it certainly doesn’t bring happiness. Reducing misery is not the same as being happy.¬†

      • Dave

        Saars.   Thanks for the tip, we went through a local Maori trust based in Bluff, they did great work and got us some very good workers, but it was still hard to retain them and get even an 80% turn up rate for more than 4 to 6 weeks.   Im not involved anymore, have a contract to turn round a business in Queensland.

      • Polishpride – V

        Not necessarilly Sarrs Рwhether you have money or no money the most important things in life and those that make a person happy remain the same. It is a hard lesson to learn but one of the best. Unfortunately many people never learn it.  
        Here’s something to think about do you do cartwheels and jump for joy each payday and look in your bank account and see that you have been paid?¬†¬†

      • Polishpride – V

        Case in point РI have many friends who have travelled the world extensively on their kiwi OE and a number have said that the happiest people despite having very little were in Nepal. Despite having very little they were only to happy to open their homes (using the term very loosely) and share whatever they had. 

  • Grizz30

    “It’s in an area of extreme social deprivation, extremely high unemployment, total lack of desirability.“…

    I cannot agree with this statement. Southland has one of the lowest unemployment rates in the Country. I think it is about 4%. I think Southland is an area of the country that is misunderstood. Due to climate and perceived remoteness there is a desirability problem. The quality of housing might also be a problem. However there is much wealth in the rural communities of Southland.

    Invercargill depopulted for a couple of decades at the end of last centuary as old industries shut down which has created an oversupply of housing which I think is the main reason why housing in Invercargill is so cheap. It certainly is not due to extreme social deprivation and extremely high unemployment. Contrast this with Northland. Given their extremely high unemployment and social deprivation you would think their housing prices would be cheap.

    • Sarrs

      Thank you. People try and make my town sound all shit and nasty when it’s not. Yea, some of the houses are crappy and cold but we’re doing a roaring trade in the government insulation subsidy stuff.

      • GregM

         I like Invers, I also shot the shit out of some Gorons at that paintball place just out of town last time I was down that way :-)

  • nzd.gbp

    Nah can’t agree with cactus kate here.¬†
    It comes down to multiples of income. Her conclusion that it comes down to banks extending credit is an incredible conclusion. the answer is to take on more debt because rates are currently low? Housing has gone up because credit is cheap and westerners haven’t had much entrepreneurial drive for some time now, it’s about consumption on credit, and so haven’t used the opportunities to invest in businesses and instead chose housing, supported by tax treatment and fixed supply and because of immigration unmatched with the supply. Moving to areas like southland is not the answer either. Why not release more land where the industry and jobs are, or do you want them all to leave the country? I left NZ and probably won’t go back because even london is more affordable for me as a multiple of my income. Actually much much more. NZ is becoming crazy expensive and not great value for money I don’t think. France, you can buy great places for cheap for example and it has everything NZ has and more.

    I think we’ll see a lot more of this type of justification now that the boomers are retiring and they don’t want the value of their retirement fund reduced by real market incentives, such as a proper unrestricted supply. Make no mistake, it is deliberate.

    • In Vino Veritas

      I’m a baby boomer and am all for extending supply available land for housing. It’s a pretty long bow to draw blaming baby boomers for council’s urban sprawl greenie legislation.
      As Cactus points out, you arent comparing apples with apples when you try and compare housing in London with housing in NZ. For starters, and I know, since I’ve spent time in London and have an English wife, you can’t get a similar house in London, for anything like what you can get it for in NZ when you look at location, schools, proximity to CBD etc etc (and thats including earnings multiple).¬† In London, it is acceptable to live in a smaller place, but in Auckland you go for the 260sqm +, 5 bedroom number. Because you can.

      On earnings multiple, say one earns $250K in Auckland and wants to buy at 5 bedroom 320sqm house north facing in Remuera. Compare that with earning 250K pounds buying the same place in say, Chelsea, Kensington or St Johns Wood. Not like with like.

      • nzd.gbp

        I’m not blaming the boomers. I’m saying the market is deliberately geared toward keeping house prices up (via tax, supply,¬†low rates, – justified by¬†removing housing from the inflation index because it was “too complicated”) because otherwise all the wealth effect will vanish and they’ll call it a crisis because retirement funds will dry up and they’ll stop consuming. It just happens to be the boomers who got in to realestate when this policy was targeted, while the younger generations were paying off student loans.

        Cactus goes on to compare southland as an alternative to auckland. They are equally different worlds. Taking her reasoning further she’s suggesting that you can more or less buy a place by moving to a 3rd world country and leave where the jobs are and I’m saying you don’t need to if you look further afield.¬†
        She doesn’t compare the opportunities that each generation experienced re. home ownership and yet scoffs at intergenerational inequity. She’s saying that because the market clears and there’s still demand for housing that proves affordability.¬†It does in the aggregate sense but we are precisely not talking about that. She say’s it’s ok because rates are low at the moment and you can service more debt. What about when this blatant manipulation is seen for what it is. In this context it’s ironic looking at the furore over the libor scandal.

  • jay cee

    of course renting is an option if you are not planning to have a family.some of us don’t have the financial nous to be able to budget our lives till retirement and beyond. 40 odd years ago we built our first home pretty basic but it served its purpose. 25 years on we built again brick and tile with all the mod cons. redundancy finished that dream as we had a pretty high mortgage.
    so we sold up and used the equity to buy freehold out of auckland. moral of the story as my wife and i are reaching retirement age we at least don’t have to rely on the good graces of a landlord to keep a roof over our heads.¬†

  • Mr_Blobby

    Agree with most of what cactus says. But when you get older and want or have to reduce your work hours. The first thing you have to do is reduce your outgoings. The biggest outgoing for most people is Mortgage or Rent. If you have a debt free house and no other debt you don’t need anywhere near as much income as you might think, to live reasonably well. A debt free house and a bit of passive income on the side should be everyone’s goal.

  • Mediaan

    Re Ohai house recommendation:

    I agree, rural Southland has amazing deals.   One guy reckons he swapped his ute for a house not far from that one.   And Invercargill has advantages too.

    And yes, you are right about benefits (and government salaries) being pretty much the same as anywhere else in the country.   It gets snowy and cold occasionally, but you generally have a coal burner on which you can also cook and produce hot bath water.   Coal is plentiful.

    And you are only a couple of hours from Queenstown, at Ohai.   Queenstown has the highest property values in the country.

    Nice people, too, give or take a few red necks and gang members in 4WDs.

    But.

    Don’t rush to buy it before you check out Solid Energy and coal extraction and gas fracking plans for Ohai. ¬†¬†

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