A Herald report says young people could buy houses in Auckland if they stopped spending on BMWs and trips to Bali. The Spinoff is stepping in to help these mythical big-spending Millennials.
Over the last few years, several people have argued that Auckland has a problem with “‘housing unaffordability”.
But today, the Herald printed a report aimed at exposing the hidden truth behind the “expensive house” theory. In it, Squirrel Mortgages chief executive John Bolton argues young people would be able to scrape together the $164,000 they need for a deposit on an average house in Auckland if they stopped blowing their savings on the Soho channel and bought $3000 cars.
Eye-opening stuff. However the story’s most mind-bending quote belongs to conveyancing lawyer Bruce Dell, who has this diagnosis for why young people aren’t buying houses in Auckland:
“Modern young people do not necessarily want the homes like we did ‘in the old days’. They want to go to Bali twice a year; they want to drive a BMW on lease; they want a 42″ plasma TV; they want to spend $200 at the bar on Friday night and they want to enjoy their two substantial incomes whilst they are childfree.”
It’s a convincing case, but it appears to have some holes. Though Dell comes up with a vivid description of a “young person”, we at The Spinoff haven’t seen many of our peers pining after leased BMWs or ‘plasma’ TVs lately. It almost feels like the character he’s describing is a fictional “young person” invented in the mind of a self-justifying Baby Boomer who bought a Ponsonby villa for 14 cents and a sack of cheese, and is now desperately trying to convince himself it’s the kids’ own fault they’ll never be able to afford a house in the city they grew up in.
Here are some undisputed facts:
- The median house price in Auckland is 9.7 times the median household income
- Demographia rates housing as “severely unaffordable” when that figure is 5.1 or more
- Before 1990, Auckland houses cost about four times the median income
- Auckland is now ranked the fourth-least affordable major housing market in the world
- The average Auckland house earned $83,000 last year
- The average Auckland worker earned $46,800 last year
The Spinoff believes those issues may have contributed more to young people not being able to afford houses in Auckland more than their habits of splashing out on BMWs and Bali holidays.
However, we decided to test the strength of the Dell/Bolton theorum. Today we announce our search for Auckland’s flashiest young house-hunter. The grand prize in The Spinoff’s Great Millennial Big-Spender Hunt is a $1000 grant to the first aspiring home owner who can prove they fit all the Dell/Bolton symptoms.
To win the Great Millennial Big-Spender Hunt grand prize of $1000 cash you must:
- Be 35 or under
- Have a leased new BMW
- Have taken two trips to Bali in the past 12 months
- Have a current Sky subscription
- Be able to show a receipt for a 42 inch plasma TV
- Be able to prove a spend of $200 on a single night out in the past 12 months
- Be based in Auckland and looking to buy a first home there
The first big-spender who can prove they’ve completed these challenges will receive $1000 out of the pocket of Spinoff editor Duncan Greive. Get in quick – there’s sure to be a scrum!
To apply, email duncan@thespinoff.co.nz.
UPDATE: Herald investigations reporter Kirsty Johnston has written this excellent opinion piece about her efforts to buy a house.