Renters Listen up

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  1. Post
    #76
    The whole telling others to pull themselves up by their bootstraps allows people to pat themselves on the back and feel superior. It's pretty difficult to overcome sentiments like that to have rational dialogue, because our ego's lap it up. Appealing to this type of emotion is political gold for anyone not actually wanting to take actions to fix issues.

  2. Post
    #77
    Why cant people go on stepping stones? Renting, Buy Small, Buy Bigger.

    The problem is that all the 'mum and pop' investors with one or two investment properties are buying up the same places first home buyers could use as stepping stones so this inflates these small places values. Then the larger places values also increase to reflect the size in comparison to the smaller places.

    So if we can find a way to get a lot of these 'mum and pop' 1 or 2 rental investors out of the market, we may see a balancing in the real estate market. However, with no capital gains tax (a poison chalice for any government) or any other safe alternative investments that can give similar capital gain returns, we are stuck with the problem.

    This means people need to make the jump from Renting to Buy Bigger and that is mostly impossible for many people.

  3. Post
    #78
    Indigo1 wrote:
    TBF there is a lot of truth in that advice....my friends spent 20-40k on OE's, brunched on weekends, spent shitloads on alcohol and coffee, had sky etc. etc.. We had one small trip per annum, very rarely went out/never brunched/dinner etc. out/had a coffee at a cafe in the weekend. Surprise surprise we were able to save and buy a nice house in an ok part of South AKL. Sure, we didn't have any kids and had reasonable jobs (prob below AKL average income though)
    I agree there are ways for individuals to get out of inequality, but the solution to getting out of inequality exacerbates the broader macro problem of growing inescapable inequality.

    With growing disparity, the risk is something solidifies the growing number of parts into the sum... It this case, renters band together.

    If this trend continues and rents get up to 40-50% of disposable income , sooner or later we might have the 'Rights for Renters' political party, who's purpose is to make renting an identity and try to cap rents... maybe at 1% of property value.

    if renting becomes a political identity it's probably going to end bad for a lot of home owners... but what do you expect those people to do when rent is up 80% in 9 years?

    the government is proposing 95% mortgages and the reserve bank is axing interest rates... it's just pouring more fuel on the fire.. and renters are just expected to figure it out some how.

  4. Post
    #79
    Some of it comes down to education. Since the school system doesn't cover finance issues faced on a daily basis, many people just get left behind.

    Auckland is a bit of a shit show. But if you were buying in CHCH and didn't have silly expectations from your first house, you can get on the ladder for 300k. That's excluding tiny units that are sub 300k. How many people these days will be keen on that though? Not many. If you're determined though, and realise it's not a forever house, that is how you get started. Everyone wants the 600k+ house to start with though, tough luck.

    Flipside to that, is that landlords are willing to buy such properties as people will happily rent them. Said properties often sit on the market for a while too, so everyone is getting the opportunity to buy them. First home buyers included.

  5. Post
    #80
    Indigo1 wrote:
    TBF there is a lot of truth in that advice....my friends spent 20-40k on OE's, brunched on weekends, spent shitloads on alcohol and coffee, had sky etc. etc.. We had one small trip per annum, very rarely went out/never brunched/dinner etc. out/had a coffee at a cafe in the weekend. Surprise surprise we were able to save and buy a nice house in an ok part of South AKL. Sure, we didn't have any kids and had reasonable jobs (prob below AKL average income though)
    I think daily cafe coffee is a waste of money, but let's not pretend that $4 x 5 x 52 = $1040p.a is preventing people from buying houses.

    It's far more important that you were DINKs. No amount of coffee abstinence is going to meaningfully help someone in a more precarious financial situation

  6. Post
    #81
    You throw in the accompanying lunch you buy, thats $20 a day.

    Over 10 years, say 21 to 31, thats 52K. If there is two of you doing it, thats house deposit money right there.

    We've finally bought in AKL (im 31, partners 27) but we pretty much gave up our social lives for 5 years to do so lol.

    We'll be that old couple travelling who never did it while young.

  7. Post
    #82
    Coffee is only the tip of the iceberg. My partner would spend every cent earned if I didn't look after the finances.

    You've got meals out, drinks at the bar, latest iPhone, ticked up expensive to run car. Adds up really fast. I know people that spend on many if not all of those things.

  8. Post
    #83
    Timmi wrote:
    With growing disparity, the risk is something solidifies the growing number of parts into the sum... It this case, renters band together.

    If this trend continues and rents get up to 40-50% of disposable income , sooner or later we might have the 'Rights for Renters' political party, who's purpose is to make renting an identity and try to cap rents... maybe at 1% of property value.

    if renting becomes a political identity it's probably going to end bad for a lot of home owners... but what do you expect those people to do when rent is up 80% in 9 years?
    Or more importantly if renters>owners amongst the voting population, it will become impossible for any party to ignore. There could be 180' changes on certain policies like capital gains tax etc.

  9. Post
    #84
    nzbleach wrote:
    You throw in the accompanying lunch you buy, thats $20 a day.

    Over 10 years, say 21 to 31, thats 52K. If there is two of you doing it, thats house deposit money right there.

    We've finally bought in AKL (im 31, partners 27) but we pretty much gave up our social lives for 5 years to do so lol.

    We'll be that old couple travelling who never did it while young.
    Who is eating cafe meals every day? That's a totally different thing, and I've never heard of it (excluding high earners).

  10. Post
    #85
    Boreas wrote:
    Who is eating cafe meals every day? That's a totally different thing, and I've never heard of it (excluding high earners).
    Some people buy bakery pretty much every day. Smoko and lunch at $10 a pop.

  11. Post
    #86
    When my wife and I were saving for our deposit while renting, we made our own lunches. How quaint.

  12. Post
    #87
    swazi wrote:
    Some people buy bakery pretty much every day. Smoko and lunch at $10 a pop.
    tbh if you're working a job where people refer to their breaks as "smoko", if you don't have the energy to do shit when you get home, saving $5 or so making your lunch at home isn't really worth forgoing the efficiency of shoveling a pie into your mouth to refuel with and easy to eat while driving between sites,

    2x $10 a day adds up, but it's easy to fall into and far more justifiable/tempting than in white collar jobs

  13. Post
    #88
    I'd be lucky if I bought lunch one a month tbh. Have people in the office who buy lunch every single day. Must get paid a lot more than me.

    We started at looking at open homes yesterday as first home buyers. I enjoyed it, but I am sure by the time we finish we'll be over it hahaha!

  14. Post
    #89
    I went from spending $10-$15 a day on lunch Monday-Thursday and would splash out on a Friday and spend between $15-25 (lets say an average of $70 a week) for around 6-7 years to a $1 loaf of bread per week and a $5 jar of peanut butter that lasts about a month (about $2 a week). Been eating nothing but peanut butter sandwiches for lunch for 2 years and I don't see myself stopping.

    Don't get me started on what my weekends were like. $200+ on meals and drinks was pretty normal for a while.

    I don't miss fancy/varied lunches at all, knowing it's all money going to something material and much less consumable in nature (except when it goes into an overseas trip...)

  15. Post
    #90
    i almost never make my own food anymore. I just see it as a my time is worth X, it takes me Y time to make lunch/dinner and X > Y then np. I also have zero desire to buy a house so maybe different mindset. I've never understood why people have such a hard time managing finances. A lot of old highschool friends etc are all in debt up to their eyeballs with 60k utes etc. I dont get it....

  16. Post
    #91
    nzbleach wrote:
    You throw in the accompanying lunch you buy, thats $20 a day.

    Over 10 years, say 21 to 31, thats 52K. If there is two of you doing it, thats house deposit money right there.

    We've finally bought in AKL (im 31, partners 27) but we pretty much gave up our social lives for 5 years to do so lol.

    We'll be that old couple travelling who never did it while young.
    median house price + inflation target of 2% = $120k

    theft and burglary are up 24% since 2014 and police are struggling, we aren't even in the recession yet.

    so by all means keep throwing around different formulas for how to make it work and save the speech for when 3 guys come through your window in the middle of the night... I don't mean to scaremonger but people don't want to make the connection between inequality and what goes on in society.

  17. Post
    #92
    I have a home made lunch at work everyday, gotta live within yo means.

  18. Post
    #93
    So if I save my lunch money for 10 years I can have a deposit?

    Meanwhile that 500k house is probably worth over a million.

  19. Post
    #94
    I think we guess how people everyone spends at lunch and the morality of that all day but it's probably better to just say that houses are too expensive for most people.

  20. Post
    #95
    Haisley wrote:
    So if I save my lunch money for 10 years I can have a deposit?

    Meanwhile that 500k house is probably worth over a million.
    Actually it is just an indication of other savings you can do. If you can save on lunch you can save on other things. e.g. do you really need 1GBps Internet when 100Mbps will be just fine for most things.

    This is not a bad tool to casually add up your expenses - https://sorted.org.nz/tool/budgeting-tool

  21. Post
    #96
    Haisley wrote:
    So if I save my lunch money for 10 years I can have a deposit?

    Meanwhile that 500k house is probably worth over a million.
    I would just grab an apartment.

  22. Post
    #97
    I think the best solution is just to stay in and entertain yourself at home, eat on a budget and avoid the trips overseas etc... If you can move back home with your parents to save up extra... then by the time you are 35 you'll just want to kill yourself and won't need a home anymore.

  23. Post
    #98
    LiQuid.Ace wrote:
    i almost never make my own food anymore. I just see it as a my time is worth X, it takes me Y time to make lunch/dinner and X > Y then np. I also have zero desire to buy a house so maybe different mindset. I've never understood why people have such a hard time managing finances. A lot of old highschool friends etc are all in debt up to their eyeballs with 60k utes etc. I dont get it....
    A lot of my lunch is just leftovers from dinner. Cooking meals for 3-4 people for the two of us means we can just do that which is really helpful.

  24. Post
    #99
    nzbleach wrote:
    I would just grab an apartment.
    Why?

    3 bedroom apartment is on par if not more expensive than a 3 bedroom house in Wellington (which is what and where I'm looking).

  25. Post
    Soui wrote:
    A lot of my lunch is just leftovers from dinner. Cooking meals for 3-4 people for the two of us means we can just do that which is really helpful.
    This. Minimal extra labour for significant savings.