Hard News by Russell Brown

Read Post

Hard News: Behind those Herald home-buying stories

141 Responses

First ←Older Page 1 2 3 4 5 6 Newer→ Last

  • GLaird,

    They didn't use that 30k towards the deposit either but for renovations and advertising according to the article so what we're looking at here is a large equity gift from mum and dad. Such a misleading article in so many ways.

    AK • Since Oct 2009 • 12 posts Report Reply

  • Danyl Mclauchlan,

    Do those stories drive much traffic? I see them more as native content from the newspaper's last major advertising revenue stream.

    Wellington • Since Nov 2006 • 927 posts Report Reply

  • James W,

    Yup, when I saw Ron Hoy Fong's name yet again, I too did a Google search to check how many times the Herald had done his PR work for him. The problem is they keep forgetting to put the "Sponsored Content" tag on all his stories.

    Since Jul 2008 • 136 posts Report Reply

  • mark taslov,

    One wonders if we’re even close to reaching peak neo-liberalism and how much worse this might get before it improves. People are living in cars and we celebrate speculators, nepotism and profit. Moral shortcomings framed as economic wins.

    Te Ika-a-Māui • Since Mar 2008 • 2142 posts Report Reply

  • Tom Johnson, in reply to Danyl Mclauchlan,

    I agree. They seem to be advertorial rather than informative and we know that media companies see this kind of story as a part of a parcel of options to warm advertisers.

    Live at home for free, don’t go out and get mum and dad to gift you money seems to be the special secret here. It’s all so simple, get mum and dad to buy you a lifestyle. Genius, gotta get one of those rich parent types pronto.

    hamilton • Since Mar 2016 • 97 posts Report Reply

  • Rich of Observationz,

    Also, notice they were getting $470 in rent. A $640k mortgage costs about $800 a week to service in interest costs alone (plus obviously you have rates, maintenance, etc to take care of). So if they were actually fully financed, they'd be losing over $300 a week in real cash. Because they are spending their parents gift, they are only a convenient $10 in the hole before rates, etc.

    Of course they hope to make enough of a tax-free gain to offset this. Taxpayers without rich parents, please note that the government is taking money out of *your* pockets to subsidise the kids in white T-shirts. I guess everyone's ok with this?

    Back in Wellington • Since Nov 2006 • 5543 posts Report Reply

  • Nick Russell,

    These stories remind me of that hoary old chestnut they used to tell about sharemarkets being overheated when you start getting stock tips from cab drivers and the like. When the Herald and Stuff are publishing stories basically encouraging young people to invest in the housing market regardless of whether they can afford to, I start to wonder whether the crash is going to be this month or the month after.

    Wellington • Since Jul 2008 • 100 posts Report Reply

  • Luke Williamson,

    Thank you for doing this Russell. It was just about driving me nuts reading through those to discover the lies on which they were based. It's just so awful and sends a message to all the young workers and couples out there that the reason they can't buy a house is because they are lazy and/or dumb. I pray to god that they vote for some change this year.

    Warkworth • Since Oct 2007 • 292 posts Report Reply

  • Russell Brown, in reply to Rich of Observationz,

    Of course they hope to make enough of a tax-free gain to offset this.

    Yeah, that's the underlying assumption in most of these stories.

    Auckland • Since Nov 2006 • 22293 posts Report Reply

  • Ian Dalziel,

    Wobbles ahead?
    Ok so that'll work for one generation...
    ....what'll this crop of 'giftees' leave their kids?

    and then probably all the dead baby boomers' personal credit card debt will skew the system (not everybody's parents are rich or living within their means)...

    Christchurch • Since Dec 2006 • 7565 posts Report Reply

  • Matthew Poole,

    Then we get Liam Dann, yesterday, talking about how the average Auckland house price increased by $114,000 last year. Which means the average purchaser's average 20% required deposit increased by $22,800 last year. That's probably almost literally a (very small) truckload of smashed-avo brunches just to keep up with the increase in the required deposit, not actually to achieve the deposit amount.

    But yes, oh propertied classes, please do keep telling those of us who are looking longingly skywards for a hint of the bottom of the property ladder how we're ambitionless losers who simply need to work harder and spend less.

    Auckland • Since Mar 2007 • 4091 posts Report Reply

  • Ian Dalziel,

    Christchurch • Since Dec 2006 • 7565 posts Report Reply

  • Matthew Poole, in reply to Nick Russell,

    When the Herald and Stuff are publishing stories basically encouraging young people to invest in the housing market regardless of whether they can afford to, I start to wonder whether the crash is going to be this month or the month after.

    The Herald has to be making a fair whack of cash off all the non-bank lenders that're advertising in the business pages these days. ISTR similar adverts back in '06-'07, and we know how that all played out.

    Auckland • Since Mar 2007 • 4091 posts Report Reply

  • Matthew Poole, in reply to Ian Dalziel,

    The secret is drainlaying…
    …and being in Palmerston North!

    Don't forget "He lived at home, paying $50 in board a week".

    There's a very consistent theme of parental largesse that runs through most of these stories, be it wedding gifts, equity gifts, or room and board at below-market rates (frequently $0).

    Auckland • Since Mar 2007 • 4091 posts Report Reply

  • Moz, in reply to Matthew Poole,

    the average Auckland house price increased by $114,000 last year. Which means the average purchaser's average 20% required deposit increased by $22,800 last year

    So if you can't save $22,000 a year you're getting further away from buying that median house, not closer. I have been through the "watch my savings, look for places I can afford" thing and it is no fun.

    The sad thing about the "start with an investment property" advice is that it's actually correct. You pick up a great number of not-so-hidden subsidies when you invest rather than inhabit, and they make a real difference to how fast you can save for somewhere to live in. Or to put it another way. I'd be about $20,000 a year richer if I moved out of my house, rented it out, and rented a room in a share house (we run our house as a share house now, that part wouldn't change).

    The problem with buying a cheap investment property is that capital gains tend to accrue at a higher rate to more expensive properties. You $300k run-down flat will go up slower than the market average but the habourside mansion will go up faster... it all evens out, just not in your favour.

    Sydney, West Island • Since Nov 2006 • 1043 posts Report Reply

  • Te Radar,

    Thanks so much for this Russell. Finally explained. Also: Sheez.

    Auckland • Since Apr 2010 • 11 posts Report Reply

  • Glen Koorey, in reply to Matthew Poole,

    Then we get Liam Dann, yesterday, talking about how the average Auckland house price increased by $114,000 last year. Which means the average purchaser's average 20% required deposit increased by $22,800 last year.

    I never understand why the media focus is always on what the AVERAGE price is doing. I'm pretty sure that most first home buyers will be aiming closer to the lower quartile (or even lower 10%), so these "average" numbers are somewhat irrelevant to what kind of deposit/mortgage they will actually need.

    Christchurch • Since Apr 2013 • 19 posts Report Reply

  • Jason Kemp,

    All of these property stories are just click bait to help out the advertising department at the Herald. I use Ben Torkington’s Chrome extension and it identifies the source of click bait stories. These ones just get labelled property.

    What I dislike about the property stories is that when it matter no real investigation is done. Fletcher Building said in February that their profit forecasts were correct. A matter of weeks later they did a write down of more than 100m.

    We never got anything really from the Herald on how such a thing could happen. It is hinted at reasons in other stories but property advertisers are one of the few remaining “rivers of gold” left from the classified department.

    For the past couple of years I have been ignoring the home page and hoping there are some useful stories in the business or tech sections. Really hard to find any content in the Herald that is useful to me. Stuff looks to be worse and so the StuffME merger discussions continue.

    I was at my local Foursquare yesterday when they were closing up. They had dozens of newspapers they were trashing. Even offered me a free one. I declined.

    Auckland • Since Nov 2006 • 349 posts Report Reply

  • Alan Perrott,

    on the bright side; it's not a bad look if you like a bad look.

    Auckland • Since Nov 2006 • 428 posts Report Reply

  • Matthew Poole, in reply to Glen Koorey,

    I'm pretty sure that most first home buyers will be aiming closer to the lower quartile

    Bottom quartile in Auckland is, last I saw, in the vicinity of $600k, meaning a 20% deposit of around $120k, and competing with speculators who are eyeing up the gentrification-induced capital gains that come with such cheap housing.

    The reality is, in Auckland, you are facing upwards of $600k or a commute of well over an hour on a good day. That's the binary option unless you're OK with a one-bedroom apartment. My wife and I could afford a house, if we were prepared to live halfway to Hamilton (literally) and commute to the jobs we both very much enjoy that are located in the Auckland CBD. It would, of course, come with a standard commute of about 90 minutes each way, stretching out to well over two hours at least once a month. A daily commute that we are not willing to inflict on our two pre-school children, and, honestly, we should not have to be forced to make that choice in order to buy a house on an eighth-decile household income!

    Auckland • Since Mar 2007 • 4091 posts Report Reply

  • Moz, in reply to Glen Koorey,

    I'm pretty sure that most first home buyers will be aiming closer to the lower quartile (or even lower 10%),

    Only those who have no other options. Buying the bottom-end houses is rarely a good idea because they tend to stay at the bottom of the market. Viz, as house prices go up the bottom of the market go up less as a percentage than the middle and top. That's completely aside from the actual reasons those houses are cheap - often the location is unhealthy or the house has major problems. You don't want to buy "excellent view of the underside of a motorway overbridge, through the holes in the roof".

    Sydney, West Island • Since Nov 2006 • 1043 posts Report Reply

  • Matthew Poole, in reply to Moz,

    I suspect that Glen, being from Christchurch, has no idea what the bottom quartile of Auckland's housing actually looks like. Zero non-private-car transport options, and deciding whether you prefer blue or red when you pick the gang affiliation of your neighbours.

    Anyone able to translate the worst parts of Otara and Mangere into Christchurch?

    Auckland • Since Mar 2007 • 4091 posts Report Reply

  • Jason Kemp,

    Last week I had to drive to an after work hours project. Normally it takes me 5-10 mins. It took 1 and a quarter hours. I had allowed 20 mins which was triple the usual time but there was an extra wide crane truck blocking all of a lane and then some plus other traffic delays I didn’t see. It seems to me that driving anywhere in Auckland during rush hour is almost impossible.

    Commuting by car is not an option and I’d guess bus is not very good for similar reasons. The train is good but until the CRL comes online it is very limited and frustratingly slow.

    Good luck to anyone who thinks they can buy on the city outskirts and commute. The only viable option is to remote work and / or move to another city or town in my view.

    Auckland • Since Nov 2006 • 349 posts Report Reply

  • Moz, in reply to Matthew Poole,

    Anyone able to translate the worst parts of Otara and Mangere into Christchurch?

    Closest I recall is probably Aranui, maybe Shirley. Even so, in Auckland terms those are more "the rough end of the North Shore" than "the bad part of South Auckland". But yeah, I could have added "gunshot holes in the roof" but my standards for rough neighbourhoods changed when I got to Sydney.

    What kinda of amuses me is that the rough parts of Sydney have weird edges and caveats - a white guy wouldn't want to walk home drunk through "the Block" in Redfern or the alleyways behind Kings Cross late at night, but you're generally perfectly fine wandering through there during the daytime. Whereas some of the western suburbs are just no go zones all the time because you need a car to go there, but you need the right sort of car to go there safely. Specifically, a popemobile or a beaten up Mk 4 Cortina... there's no safe space in the middle.

    Sydney, West Island • Since Nov 2006 • 1043 posts Report Reply

  • Kumara Republic,

    I'd have to agree that these pieces are FIRE-sector advertorials pretending to be news stories. I know motivational snake oil when I see it, and it's getting horribly tiresome. It'll sting painfully, but bring on the bubble burst for the sole reason that it might just force Generation Rent-Seeker to eat humble pie. More importantly, I hope a bubble burst will discredit the currently dominant just-world fallacy that's polarising advanced societies these days.

    The southernmost capital … • Since Nov 2006 • 5341 posts Report Reply

First ←Older Page 1 2 3 4 5 6 Newer→ Last

Post your response…

Please sign in using your Public Address credentials…

Login

You may also create an account or retrieve your password.