I purchased my first house in 1983 for $63,000. It was slightly above the auckland price. At the time my annual income was $5000 a year although the average income was more alike $8500 a year. So lets take $8500 as a % of $63,000 – that equals 13.5%. Now lets take the average income in 2014 of $45,000 and work out what 13.5% of that equates to . If my maths is correct the answer is $607,500. (Now isn’t that a coincidence our 5 bedroom EQ Homes at the Grove www.eqhomes.co.nz, are selling at that same price!!!).
So in 32 years the index of average pre tax salary to average house price in Auckland ( this is the best Index of House Affordability) has stayed the same according to my experience. This took me 5 minutes to work out and no cost. Imagine the research and costs the political parties are spending to come up with a different answer to justify us not buying a house. Its too bad we New Zealanders just love our houses and that love affair will not be broken!! So buy now – there will never be a better time for you to fall in love!