NZ Herald
  • Home
  • Latest news
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather forecasts

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
    • The Great NZ Road Trip
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
    • Cooking the Books
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • What the Actual
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies

Liam Dann: Young house hunters should just give up

Liam Dann
By Liam Dann
Business Editor at Large·Herald on Sunday·
8 Apr, 2017 05:00 PM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Unless things change In the housing market, young house hunters should give up, Liam Dann writes. Photo / 123RF

Unless things change In the housing market, young house hunters should give up, Liam Dann writes. Photo / 123RF

Liam Dann
Opinion by Liam Dann
Liam Dann, Business Editor at Large for New Zealand’s Herald, works as a writer, columnist, radio commentator and as a presenter and producer of videos and podcasts.
Learn more

Last week's property statistics were horrible for anyone hoping to get on the property ladder in Auckland, says Liam Dann.

On the surface they looked promising. But that hint of change in the market was really just a tease. It's as if the market was trolling first home buyers. Quotable Value New Zealand data showed Auckland region prices fell 0.2 per cent in the three months to the end of March.

The annual rate of growth for the Auckland region fell to 12.3 per cent - down from peaks above 20 per cent in 2015. But it's not nearly enough to change the game for first-home buyers. Not even close.

If you convert that 12.3 per cent rise into dollars (which, unfortunately, is what we have to pay for things with) the average value of a house in the Auckland region rose by $114,000 in the past 12 months.

I'm not sure how many flat whites that is, but if I was young and contemplating the Auckland housing market I'd waste my money on something a bit stronger.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

Normal people should probably just give up. If you are on any kind of regular wage then scrimping and saving to buy a house is futile.

Keep saving, by all means. Save hard, boost your KiwiSaver contributions, start a share portfolio, maybe even start a business. But stop thinking about the housing market.

Based on the case studies we've seen in the media in the past few weeks some young people are so desperate to own a home they are gearing every aspect of their life towards it. They are effectively learning to become property investors in order to get into the market. This is a terrible way to resolve the housing crisis. The last thing New Zealand needs is more property investors.

To quote Dr Oliver Hartwich from economic think tank The New Zealand Initiative: "Booming property markets create a mirage of wealth, not wealth itself." That's not a lefty liberal, millennial view. That's the view of most economic and financial market experts in this country.

The real extent of this problem is laid bare when you consider we now have a consensus between the disaffected Left and the financial establishment on the Right.

Discover more

Opinion

I've jinxed the global economy

18 Mar 04:00 PM
Opinion

Liam Dann: Why is Graeme Hart so rich?

30 Dec 07:18 PM
Opinion

Dann: Let's ask China about gridlocks

02 Apr 01:56 AM
Opinion

Liam Dann: Housing bubble springs a leak

04 Apr 05:00 PM

We've admitted we have a problem, we know the behaviour is damaging us long term - but we still won't address it.

That is how psychologists define addiction these days. New Zealand has a property addiction.

Advertisement
Advertise with NZME.

As Hartwich points out, we could add two zeros to the price of every house in the country and we'd all be at exactly the same place on the property ladder.

We'd have created no new wealth for the nation. We'd simply have widened the gap again between the haves and the have-nots.

The base price of a house is now so high that, even as growth slows, it is laughable to talk about young house hunters bridging the gap by giving up a few treats.

If Auckland growth keeps slowing we might soon see annual percentage price increases back into single digits.

The maths will still be hopeless.

We've admitted we have a problem, we know the behaviour is damaging us long term - but we still won't address it. That is how psychologists define addiction these days. New Zealand has a property addiction.

In January 2013 the average Auckland region price was $610,000 and the annual growth rate in Auckland that year was 14.5 per cent.

Advertisement
Advertise with NZME.

That meant prices rose $88,000.

The average value in Auckland to the end of March this year was $1.045 million.

The annual growth rate needs to drop to 8.5 per cent just to bring the nominal rise back to an $88,000 annual increase.

But wait, it gets worse.

The latest QV numbers showed a quiet summer. Prices declined by 0.2 per cent for the months of January, February and March.

The February QV report showed Auckland prices fell by 0.7 per cent in the three-month period for December, January and February.

Advertisement
Advertise with NZME.

That means they actually rose again in March.

Real estate agent Barfoot & Thompson's numbers data for March, also released last week, confirmed this.

That "suggests there remains some way to go before the Auckland housing market rebalances", ASB economists noted in their commentary.

It is hardly surprising. We know Auckland's supply and demand issues have not been resolved.

The population is still growing much faster than we can build new houses.

Exactly the same thing happened this time last year. New rules and regulations came in to force in October , cooling the excesses of the market for a few months, then it all came back again in March.

Advertisement
Advertise with NZME.

We need a big structural change to put the equation back in balance for young New Zealanders.

This Government has grudgingly in the past year or so started to acknowledge the problem.

It thinks it is doing enough but it isn't. It is too comfortable hiding behind the mirage of wealth creation.

It has been a convincing illusion, creating a confidence that has driven very real domestic growth.

It may even get National through the next election, but it's not sustainable.

The next Government, regardless of which party forms it, needs to confront housing inequality.

Advertisement
Advertise with NZME.

Otherwise New Zealand will eventually have its own Brexit or Donald Trump-style backlash.

That would be terrible for all of us.

The populist rebellion of angry voters would be a harsh intervention that forces us all to go cold turkey.

Save

    Share this article

Latest from Companies

Premium
Healthcare

Concern 'patients will suffer' as practices with 46,000 enrolled switch funder

11 May 08:50 PM
Premium
Manufacturing

Tip Top profits surge with $15m dividend after Froneri acquisition

11 May 05:00 PM
Premium
Tourism

'Nothing was going to stop me': Pioneer who built ski resort from scratch sells up

09 May 07:00 AM

One tiny baby’s fight to survive

sponsored
Advertisement
Advertise with NZME.

Latest from Companies

Premium
Concern 'patients will suffer' as practices with 46,000 enrolled switch funder

Concern 'patients will suffer' as practices with 46,000 enrolled switch funder

11 May 08:50 PM

The centres say changing their primary health organisation will help avoid fee increases.

Premium
Tip Top profits surge with $15m dividend after Froneri acquisition

Tip Top profits surge with $15m dividend after Froneri acquisition

11 May 05:00 PM
Premium
'Nothing was going to stop me': Pioneer who built ski resort from scratch sells up

'Nothing was going to stop me': Pioneer who built ski resort from scratch sells up

09 May 07:00 AM
Rice to the occasion: How a Queenstown brewery snagged gold at Tokyo Sake Challenge

Rice to the occasion: How a Queenstown brewery snagged gold at Tokyo Sake Challenge

09 May 04:15 AM
Connected workers are safer workers 
sponsored

Connected workers are safer workers 

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • What the Actual
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven CarGuide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP