00:00:00
$750,000 house if that's the average
00:00:02
yeah that's the average in New Zealand
00:00:05
right you can buy a house in Oakland for
00:00:07
750 Grand but there might be people who
00:00:10
are living in quite nice parts of town
00:00:12
renting and if they were to buy in that
00:00:14
area like you alluded to they're
00:00:15
actually going to need serious cash to
00:00:18
be able to uh have the deposit but also
00:00:21
service a debt welcome to checks and
00:00:22
balances board You by Lighthouse
00:00:23
Financial I'm Michael Vincent that's
00:00:25
James Blair and today the most
00:00:27
affordable housing in New Zealand
00:00:32
we're back in your life to talk about if
00:00:36
where you live is too expensive to own a
00:00:39
property where else can we go yeah 100%
00:00:42
right and we often hear this in the
00:00:43
media around houses prices being too
00:00:45
expensive They're unattainable Out Of
00:00:48
Reach we can't do it whole lot of
00:00:49
reasons why we can't now we're not
00:00:52
saying that you should rush out and
00:00:55
Corner the market and partyer but you
00:00:59
know there are definitely options out
00:01:01
there where there are some cheaper
00:01:03
houses I got to say Mike is the most
00:01:05
Jeffer of Jeffers and when he's gone
00:01:08
through this list of places around the
00:01:11
country really educating himself yeah
00:01:13
look to be fair the the one that got me
00:01:15
was the district gray I just couldn't
00:01:18
believe there's just a district called
00:01:19
gray if we have any listeners in Gray I
00:01:21
would love to know please let us know so
00:01:24
today's the whole idea about today's
00:01:25
topic is if you want to buy a $750,000
00:01:29
house which is the average house median
00:01:32
house price in New Zealand as of 2021
00:01:35
2025 interestingly enough in
00:01:39
2015 it was
00:01:42
$45,000 so over 10 years Mike that kind
00:01:45
of assumption of I mean people talk
00:01:46
about house prices doubling over 10
00:01:49
years well first you got to remember
00:01:50
that house prices are down so probably
00:01:52
still pretty close to true but our
00:01:55
assumptions are a little bit more
00:01:57
conservative right I think to double you
00:01:58
got to be like seven wee 7% every 10
00:02:01
years yeah we assume maybe like more
00:02:02
like 5 5 and a half somewhere that yeah
00:02:04
100% we're just looking at long-term
00:02:05
averages and again that 2015 to 2025 St
00:02:09
you've got a pretty big run up there uh
00:02:11
with those really low interest rates
00:02:13
around Co but you actually saw if you
00:02:15
look at the long-term Trend we're kind
00:02:17
of back around where if you took the
00:02:20
2021 run out of the equation and just
00:02:22
kind of long-term average it out house
00:02:24
prices are back around where they should
00:02:25
have been so it's like a carrot top
00:02:27
right like if you look it went up it
00:02:28
went down and then it's you cut off the
00:02:31
the the little up and down bit and the
00:02:33
trend looks pretty good yeah you cut off
00:02:34
the little up and down bit anyway enough
00:02:36
fundamental analysis from James so why
00:02:38
does this matter look home ownership is
00:02:40
a really big deal for customers right
00:02:42
and for for everybody in New Zealand and
00:02:45
obviously you know sometimes you can't
00:02:47
afford to just buy in the patch where
00:02:49
you're living a lot of people say to me
00:02:50
Mike I want to I want to buy my first
00:02:52
home living now where are you living
00:02:54
well I'm living with my mom and dad in
00:02:56
remuera okay well we're probably not
00:02:58
going to be able to do that are we so
00:03:00
we've got some strategies to get around
00:03:01
that and maybe some other ideas of how
00:03:03
you can get in there so this is the this
00:03:05
is the concept of R investing coming
00:03:06
back again which the more I think about
00:03:08
it the more I like where you can
00:03:10
actually rent in a much nicer house than
00:03:13
you can afford and then you go and
00:03:15
invest invest elsewhere Mike to talk
00:03:18
about like why buying a house is hard
00:03:22
$750,000 house if that's the average
00:03:24
that's the average in New Zealand right
00:03:27
you can buy a house in Oakland for 750
00:03:29
Grand
00:03:32
are of rting and if they werey like you
00:03:36
alluded to they actually need serious
00:03:39
cash to be able to uh have the deposit
00:03:42
but also service a debt yeah and it's
00:03:43
not just an ockland thing this is the
00:03:45
same is you know Christ Church
00:03:47
Wellington toonga other kind of of the
00:03:49
larger City centers in New Zealand so
00:03:51
it's not just isolated to Oakland and
00:03:54
there may be other reasons why you think
00:03:56
actually rent vesting might be a better
00:03:58
equation for me you might get a better
00:04:01
yield if you're buying somewhere else
00:04:03
you might be living in accommodation
00:04:05
that's provided by your employer you
00:04:08
might be living in your partner's house
00:04:10
you know so there are other options
00:04:11
around how you yourself can get into the
00:04:13
market even though you're not buying
00:04:15
that owner occupied property for 750 or
00:04:17
somewhere around there that's right so
00:04:19
after this break we're going to break
00:04:20
down for you uh the key things to
00:04:23
consider if you're going to invest
00:04:24
outside of where you live and the areas
00:04:27
in the country that are cheaper bar one
00:04:30
area has a median price under
00:04:33
$300,000 so Mike all these cheap P sound
00:04:35
great how am I going to buy one yeah
00:04:37
look so first thing is talk to a
00:04:38
mortgage broker don't go talk to your
00:04:40
bank we've got a ton of different
00:04:42
options different lenders Banks loan
00:04:44
products and we can tell you how you can
00:04:46
get that investment property sooner
00:04:48
rather than later so reach out to
00:04:49
Lighthouse mortgages now back to the
00:04:51
show all right James so you've given me
00:04:53
the teaser there is a region in New
00:04:56
Zealand with a house average house price
00:04:58
under 300,000
00:05:00
I don't believe you so there is but
00:05:02
before we get there let's talk about
00:05:04
some of the reasons why we might look to
00:05:06
invest into the regions over the big
00:05:09
city centers y so the first one like
00:05:12
lower entry price the houses are cheaper
00:05:14
when we look at West Coast Hastings
00:05:16
funger heads they're still affordable
00:05:19
yeah they are I mean that does come with
00:05:21
the risk of there sometimes you may not
00:05:23
be able to find a tenant right it is all
00:05:25
a risk-reward tradeoff so yep lower
00:05:28
entry point um however there risks that
00:05:30
do come with that but the other thing is
00:05:32
if they are cheaper there is potential
00:05:35
growth uh like say the cwin district has
00:05:38
grown quite quickly you might be you
00:05:41
might be able to buy an area which is
00:05:43
going to grow faster so that could I
00:05:46
mean could work out might not work out
00:05:48
yeah and again one of those things with
00:05:49
that higher growth potential with the
00:05:51
risk side sorry to be the downer here is
00:05:53
if you're buying in an area which is
00:05:55
really riant on one industry you are
00:05:58
kind of focusing your or your you are
00:06:00
exposing yourself to a really high level
00:06:03
of risk so you should be compensated
00:06:05
with that reward absolutely let me get
00:06:07
back to being the positive guy that I am
00:06:10
though another benefit is strong rental
00:06:12
demand so population growth and job
00:06:15
opportunities are fueling rental demand
00:06:17
in many regions there's not a lot of
00:06:19
houses obviously there's you know not as
00:06:20
much investment as the main city centers
00:06:23
so I have run some numbers and some of
00:06:25
these rental years are looking pretty
00:06:26
good yeah absolutely and again it's um
00:06:28
we saw this a lot of um where people
00:06:30
moved out of Orland where they couldn't
00:06:31
afford those Orland house prices and
00:06:33
they did move to kind of some of the
00:06:35
biggest city centers but you do see uh
00:06:38
people shifting outside of Orland to a
00:06:41
different lifestyle downsizing you know
00:06:43
a lot of reasons why people move to the
00:06:45
regions yeah so I mean we talked about
00:06:47
some of the benefits and Mike touch on a
00:06:49
couple of the negatives I just want to
00:06:50
quickly go back to this is not all
00:06:52
sunshines and rainbows if you buy
00:06:53
$300,000 house there's a couple of risk
00:06:56
here one is a lot of these areas are
00:06:59
tied to like a couple of key Industries
00:07:03
to provide all of the um all of the
00:07:06
demand for the area so inago a good
00:07:08
example inago I don't think oh it does
00:07:11
make this list a couple of times so
00:07:13
obviously the smelter down there I think
00:07:15
that like like has 5,000 employees and
00:07:18
then impacts another 25,000 people
00:07:20
suppliers there's only 50,000 people in
00:07:23
that City so that is a big impact if
00:07:25
that goes away the other big one is
00:07:26
dairy prices so when we do think about
00:07:30
uh these these places there is more risk
00:07:33
that we might miss out on rent if
00:07:35
there's not the demand for tenants and
00:07:38
Capital Growth like we know Oakland
00:07:40
Wellington crash is going to keep going
00:07:42
up what could happen in these areas is
00:07:44
probably like a bit more yeah but the
00:07:46
other thing I think the opportunity here
00:07:48
is do some research into what's
00:07:50
happening I look at Fung a at the moment
00:07:52
and I go they are reiling the entire um
00:07:56
train line up there they seem pretty
00:07:57
hellbent on Shifting the ports up there
00:07:59
they're building a new hospital out
00:08:00
there like there's a lot of stuff going
00:08:03
on which is great news for the funger a
00:08:05
region and you've got the new modway
00:08:07
that heads up there as well to be honest
00:08:09
I look at that and I go that is
00:08:11
somewhere where you could be chasing you
00:08:13
know um capital gains and strong Ral
00:08:16
demand it's certainly somewhere that I
00:08:17
thought about for our next investment
00:08:19
property I wouldn't mind Fung at all do
00:08:21
you actually think they'll move the port
00:08:23
yes I do think they'll move the port
00:08:24
it's a lot of lot of admin lot of you
00:08:26
drive up there and along the entire
00:08:29
railroad are the new piles that they've
00:08:31
already got laid out there they are they
00:08:32
are putting some serious infrastructure
00:08:34
work to go out there and if you think
00:08:36
about it it makes sense like it does
00:08:38
actually make sense for fer to have the
00:08:40
port geographically I I get that my
00:08:42
problem is like continuation of
00:08:45
government and somebody starting
00:08:46
something and the other government not
00:08:48
finishing it let's not turn this into a
00:08:50
political rant no but one thing I think
00:08:51
would be very cool imagine a stadium
00:08:54
down at the Port F
00:08:57
no the f f have the port um the mighty
00:09:01
North and tany fars what you talking
00:09:03
about they got a stadium Orland to get a
00:09:06
stadium on CU you know we don't have
00:09:07
good stadium in Orland how sick would
00:09:09
that be opposed to I don't like looking
00:09:10
at at the the port I want to I want
00:09:12
another Stadium to look at over the
00:09:13
water okay all right cool so stadiums
00:09:16
aside let's get back to houses now James
00:09:19
you've got a list here of uh the suburb
00:09:22
and the district where their average
00:09:24
property value is the cheapest in New
00:09:25
Zealand start me off with the big one
00:09:27
baby here we go down south what is it so
00:09:30
this data is provided by one roof there
00:09:33
is one suburb in the country with an
00:09:37
average house price under
00:09:40
$300,000 it's matara in Gore and the
00:09:43
average house price is
00:09:45
$297,000 interestingly enough Mike I
00:09:47
have been there multiple times cuz have
00:09:49
you yeah there is a road from denen to
00:09:52
inle kind of shortcut through some other
00:09:55
interesting ones on this list so uh a
00:09:59
lot of these gray has three gray is in
00:10:02
the on the west coast they have three
00:10:05
suburbs within there inago and Gore and
00:10:08
cluther all of those sort of areas have
00:10:11
four of the suburbs Mike there's one you
00:10:12
wanted to talk about in Ru yeah so Tomo
00:10:15
and um ruu District now again this is
00:10:18
one of the ones I want to focus on when
00:10:19
we start to talk about risk so if we
00:10:21
look at this list and look at what are
00:10:23
the um kind of uh common themes out
00:10:26
these right these are in the regions
00:10:29
small small towns heavily reliant on
00:10:31
dairy uh and kind of Industries like
00:10:33
that you know Dairy traditionally not a
00:10:36
huge employer of people in the country
00:10:39
however you know when we get chefs and
00:10:41
dairy prices that the local towns do
00:10:43
really feel that right ruo is slightly
00:10:46
differently what do you think the risk
00:10:48
that I'm going to talk about with ruo is
00:10:50
James maybe a bit of skiing yeah so the
00:10:54
ru ski Fields um are really the clutch
00:10:59
industry around that region right you
00:11:02
know yep there's farming there's other
00:11:03
things that you know the rest of the
00:11:04
country does but the tourism around ruu
00:11:07
is really the big one and as the climate
00:11:09
increases we have seen you know uh faka
00:11:12
Papa and tur ra the quality of those ski
00:11:14
Fields has really decline right so if if
00:11:16
I say I'm thinking about buying uh a
00:11:19
short-term accommodation or rental near
00:11:21
Ru that is something I would want to
00:11:24
think about so these are the types of
00:11:25
risk you need to be assessing when
00:11:27
you're thinking about buying in the
00:11:28
regions well you'd have to be bullish on
00:11:29
the ski Fields right you'd have to go
00:11:31
that cuz I think there was the talk
00:11:32
about a government bailout or something
00:11:34
like that the cheerless closed and you
00:11:37
know there's a bit of um you know are
00:11:38
they going to get a bail out what does
00:11:40
that actually mean who is going to step
00:11:41
in and I do actually think they've had a
00:11:43
reasonable season there this um this
00:11:45
season however you know again these are
00:11:48
the risks you've got to think about um
00:11:50
when you're when you're thinking about
00:11:52
properties and the funny thing is I used
00:11:54
to go on trade me before I own property
00:11:57
and just like sort by
00:11:59
the cheapest property in the country and
00:12:02
they were always blocks of land around
00:12:03
Ru and you could get them for like 25
00:12:06
Grand you know just like big blocks of
00:12:08
nothing yeah should we buy a block of
00:12:09
land and R I always thought about that
00:12:11
and I was like I wonder what would have
00:12:12
happened to it by now if I bought it you
00:12:14
know back when I was like 18 or
00:12:15
something and probably nothing I'd just
00:12:17
be paying rates on it yeah yeah that's
00:12:20
the rates are a fair point yeah uh so
00:12:22
let's move on to where the highest
00:12:24
property growth rates are in the country
00:12:26
so obviously we've been talking a lot on
00:12:28
this podcast about how property keeps
00:12:30
dropping in value you know property's
00:12:32
down 20% there are some areas of the
00:12:35
country where we've seen double digit
00:12:37
growth in one region where we've gone up
00:12:40
24.3% over the last 12 months yeah uh I
00:12:44
would describe this as I mean a
00:12:46
statistical anonym well it might be one
00:12:49
house that got sold in this area who who
00:12:51
knows how many houses have actually been
00:12:52
sold uh I would describe this 12 months
00:12:55
not very long period of time so just
00:12:56
remember that we're not saying that this
00:12:58
going to continue to be at this but it
00:12:59
is Bucking the trend of the country
00:13:01
which is down around you know 18% to 20%
00:13:04
over the last 24 months yeah so let's
00:13:06
jump into it so the West Coast
00:13:09
24.3% growth with an average house price
00:13:12
of
00:13:14
$444,000 so once again if we look at
00:13:16
that list I had before three of those
00:13:19
suburbs that we were talking about with
00:13:20
cheap houses they were on that list on
00:13:23
the west coast otaro 15% with an average
00:13:27
house price of 650 50,000 so big jumping
00:13:30
average house price Southland
00:13:33
122% Canterbury 10% interesting Canter's
00:13:37
average house price is 550,000 now when
00:13:41
I think canbury I think Christ Church
00:13:43
remember it's a wider area so Christ
00:13:45
Church's average house price will be
00:13:47
higher but the region will be lower y uh
00:13:50
Gizzy 8% uh we got we've seen a lot of
00:13:53
people investing into gbon over the last
00:13:55
12 24 months um again you had um some
00:13:59
localized factors there you had the
00:14:00
floods that came through destroyed a lot
00:14:02
of housing um that kind of pushed the
00:14:04
demand up for housing and some people
00:14:06
have you know um been building new build
00:14:08
um houses down in gizman as well to try
00:14:10
and cope with that um but because of the
00:14:12
shortage we've actually seen you know
00:14:13
quite a jump in rental yields and in
00:14:15
rental demand I was it would be
00:14:16
interesting to see what's happened to um
00:14:18
rental prices and gizman over the last
00:14:19
12 months just like La as well after the
00:14:22
fires to go what's happened to house
00:14:24
prices and Rental yields over there yeah
00:14:26
100% uh so as you can see there's quite
00:14:28
a house prices mik uh you know half a
00:14:32
dozen double digits and then some other
00:14:34
really reasonable growth rates in
00:14:36
comparison to uh Oakland and Wellington
00:14:39
yeah 100% so why is this happening you
00:14:41
know there are different localized
00:14:43
factors for each of these regions you
00:14:45
know but you know you just think about
00:14:46
things like infrastructure projects
00:14:48
roads transport commercial developments
00:14:51
um you know are there new housing
00:14:52
developments in the region because often
00:14:54
you'll find that if you can see large
00:14:56
new housing developments these won't be
00:14:58
Supply Le there will be you know a
00:15:00
developer does knock out and go I'm
00:15:02
going to stick 50 houses in the middle
00:15:04
of nowhere and just hope that they sell
00:15:05
it will be a demand Le um kind of factor
00:15:09
that is driving the developments that's
00:15:10
often something to look out for when
00:15:11
you're thinking of investing in the
00:15:12
regions yeah so some really
00:15:15
interesting uh look we're not telling
00:15:17
everybody to go buy houses in in these
00:15:20
regions but it is an interesting way
00:15:23
where you can potentially it's another
00:15:25
strategy right and it's not for
00:15:27
everybody but it's to go look opposed to
00:15:29
trying to save a really large deposit to
00:15:32
live where you want there are other
00:15:33
options yeah 100% the big one here
00:15:36
though is going to be remember if you
00:15:37
are buying an investment property and
00:15:39
you want to use your kiwi saver let's
00:15:40
say it's your first home you've got to
00:15:42
be living in the property you know
00:15:44
usually for at least 6 months so have a
00:15:46
chat to your broker about that make sure
00:15:48
that you've got that bit down pack
00:15:49
before you go signing that sale and
00:15:51
purchas imagining mik you go to a client
00:15:53
and they're like want to buy a house and
00:15:55
you're like look I've got you approved
00:15:57
but you got to go move to gore Liv in go
00:15:59
for 6 months oh mate you could be a
00:16:00
digital Nomad in barley or in Patu
00:16:04
p on that note we will wrap up this
00:16:07
episode much love to ligh house for
00:16:09
sponsoring this episode please subscribe
00:16:11
to the channel give us a review give us
00:16:13
a like and we'll catch you next time
00:16:15
cheers
00:16:17
[Music]
