May 27th, 2011
One thing I certainly hear from most new buyers to the Nelson region is this one word.
They fire up Google and type in Homes for sale in Nelson. (alternatively they could save themselves a lot of time & effort by just going straight to realestate.co.nz directly)
And then they see it….SURPRISE.
That “surprise” translates to the most asked question I field out in the Nelson real estate market each week.
“Why are home prices in Nelson just about the same as New Zealands 3 – 4 major cities?”
On this site I have tried to offer up some explanations for that, and am constantly sharing those views also, in photos over at Nelsonians Life.
At the end of the day though its about supply and demand…..oh and living in the sunniest place in NZ which also just happens to be the Centre of New Zealand geographically.
You may have noted this past week, media publication of the fact that the OECD have released their inaugural “multinational index of well-being and wealth.”
In it, New Zealand was placed near the top, and shared the top rankings with Canada, Australia and Sweden.
Media around NZ have suggested the stand out point from the index/survey was that it was only New Zealands financial wealth that was holding us back as a nation from occupying the top spot.
Cue the chart.
Looking at that chart, I think that’s a valid point.
In covering the touchy subject of “equal to Australia by 2020” (aka Income), the OECD note the following key findings;
In New Zealand, the average household disposable income is 18 996 USD a year, lower than the OECD average of 22 284 USD.
But more importantly though was this very telling factoid;
In New Zealand, the average household wealth is estimated at 16 131 USD, lower than the OECD average of 36 808 USD.
So although household disposable income is about 85% of the OECD average, it’s the average household wealth that’s the real difference, with a glaringly low level of 44% of the OECD avg.
Mitigating that however, the OECD do state in their covering notes;
“While the ideal measure of household wealth should include real assets (e.g. land and dwellings), such information is currently available for only a small number of OECD countries.”
…so perhaps that’s what is making it harder for them to accurately judge this category.
However Aoteroa did get one a red mark when it came to the topic of working hours, or in our case long working hours.
Although there were ten member countries identified as having “employees working very long hours” that were above the OECD average, NZ was 5th on the scale.
Thoughts to ponder?
1. Do Kiwis have too much equity tied up in their homes?
2. Therefore is it something then (the home) that gives us the most security / satisfaction, that has allowed us to rate so highly in this index after all? And just perhaps items like environment, community and health play such an important part on our psyche that it does matter when its the community where you own/live in………..rather than just the one you rent in.
On the subject of Transparency
Another interesting statistic produced recently from international real estate organization Jones Lang Lasalle, was contained within their latest biennial Real Estate Transparency Index.
In singling out the “usual suspects” they went on to say;
The traditional leading pack – Australia, New Zealand, the United Kingdom, the United States and Canada – have now been caught up by a number of European markets. Sweden, Ireland and France now sit among the world’s most transparent markets.
The 2 yearly index rates 81 countries, and New Zealand placed fourth equal with Sweden in the latest one.
Is the fact that conducting real estate property transactions in New Zealand so transparent also aiding “that something” to the attraction for Kiwis, ex-pats and also immigrants?
If you wanted to investigate more about this transparency for yourself, then head on over to this page here, as good a place to start as any.
I can’t help but note that two of the countries (#1 and #4) accused by those “housing price predictor” gurus out there, also seem to be the same ones that just coincidentally rate in the top 4 places to live according to the OECD?
Lastly just to throw something in from the left field, you’ll know I’ve mentioned on here before that next to Ireland, ex-pat Kiwis living overseas make up an enormous number of off-shore Kiwis, the 2nd highest percentage of any countries population living offshore.
Now when they come back home, is what they experienced overseas (& perhaps not wanting to be replicated here) played out somehow on the local real estate market, or…..is it because they have been transient for so long…….they now want to put down “roots.”
Overall there really are just too many identifiers to tag that could point to why places like Australia and New Zealand “are meant” to have very high home prices. So its best leave it to the statistics folk I think, but there research does offer up some compelling reasons why Kiwis & Aussies place such importance on the personal home. After that, its just a supply and demand matter.
SOURCE – OECD Better Life Index (NEW ZEALAND)