this post was submitted on 27 Sep 2023
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Vince shows the numbers on how much a person must earn in order to buy a house in New Zealand

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[–] [email protected] 9 points 1 year ago* (last edited 1 year ago) (3 children)

I'm not arguing it isn't grossly unfair, but I'd like to see the calculations take into account the much higher interest rates there were.

Mortgage interest rates were over 10% for much of the 90's (and over 15% for much of the 80's), which I'd argue the dropping interest rates (in combination with the lack of housing stock) has been a large influence on house prices.

In my view, significantly increasing the housing stock (so sellers are competing to sell instead of buyers competing to buy) would go a long way towards solving this issue. And no private firm building houses has incentive to increase supply to create an oversupply, so it needs to be government led (imo).

[–] [email protected] 4 points 1 year ago (1 children)

Its really hard to make direct comparisons, because there's so many other things all different as well. For instance some things households purchase now either didn't exist back then, or are significantly cheaper now.

Say a computer, we bought our first C64 in the 80s for around $1000 at the time (it came with 2 drives, a monitor, joysticks and software). I think that'd probably be like buying a $3000 + computer these days.

But, one big thing a lot of people overlook is that for many more boomers than today's 20-30 year olds the norm was still that you could more than get by with only one person working in the family. Yes interest rates were often really high, but they were still affordable on one income. The farm hand in the /r/newzealand anecdote^1^ if they are in a relationship still can't afford to buy a house even if their partner is also in full time work.

I honestly don't think a lot of boomers even realise it. And to be honest that's potentially part of the whole cultural disconnect, because what comes along with both people working is massively less free time in a family, and often significant childcare costs that boomer families didn't pay. If you were a kid in the 80s like me there just wasn't the whole childcare industry there is today because back then, it wasn't needed like it is now.

^1^ probably either missing half the story or just not even true.

[–] [email protected] 1 points 1 year ago

Every generation has their struggles, so it can be hard to understand what it's like for others. If I felt like I had a hard life then someone started complaining about how easy my generation had it then I would probably get pretty defensive.

Elizabeth Warren wrote a book (about 20 years ago) called The two income trap about the problems for families caused by the move to having both parents work. She isn't advocating for families to choose to only have one parent working, but rather for wider societal change and some specific policies. Disclaimer: I haven't actualy read the book, only the wikipedia page.

[–] [email protected] 2 points 1 year ago

Not sure about NZ, but Australia had a much higher unemployment rate then, also. Not everyone was riding the gravy train. My family moved to the far side of the country following work that would take dad away from us 10 weeks out of 12.