Recently I had a chat to my bank about buying a house. As thirty looms on the horizon, I feel that it’s about time that I made the transition from flatting to home-ownership, despite the inevitability of my semi-self-determined protracted bachelorhood. My misgivings of itchy feet syndrome aside, it looks like I’ll be settling down in Wellington. It’s either that or Auckland, and frankly, I detest commuting.
Pricing of houses and apartments on Trademe has led me to look at something with two rooms within walking distance of the CBD. Provided I get a flatmate in, I can look at paying off the mortgage in about oh – twenty years.
This is assuming of course that I don’t put any money to the side beyond that required for rainy days and the usual maintenance / repairs. During those twenty years, I won’t be thinking about business ideas, or investing in other businesses, or trying to support my economy by buying locally made goods, because everything will become about paying down the multi-hundred thousand dollar debt hanging over my head.
Though this is more a reflection of the IT sector than my ability, compared to most people in New Zealand, I am well paid. I have no clue as to how most people manage to survive and purchase homes on a single income. More than a few don’t. I suspect many more are sacrificing things they shouldn’t as they reach for the New Zealand dream.
How exactly did we get to this state, where we value land more for it’s perceived future capital gains, rather than the goods it can produce, as if we were collecting stamps and paintings? Worse yet, how did we get to the point where we were selling it off to pay for our flat screen TV’s and second hand imported Japanese cars.
Last week Gareth Morgan concluded his column with a scathing remark about people not living within their means and a standard right wing comment about requiring foreign capital to develop. I can’t help thinking that that particular statement is only correct when it applies to New Zealand because we have so much capital tied up in land and houses.
By my non-economist observation, this is in large part because we lack of capital gains has made investment of any other kind less appealing pointless, and because we insist on buying disposable luxury goods with out unprotected commodity good exports.
I won’t flog the horse of capital gains on non owner-occupied homes, instead, I have another suggestion.
Ban consumer finance.
Force the purchasing of stereos, TVs, cars, computers, cellphones, and all those imported luxury goods illegal unless it’s with cash or EFTPOS. I wonder how much better the general population would get at saving and upskilling, and how much less rubbish we’d import if everyone actually had to save to buy an iPhone.