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Ryan Bridge: How low is too low for house prices? · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: How much do you really want the value of your
• 0:02
  Speaker 1: property to fall? And I mean really, because plenty of
• 0:05
  Speaker 1: us say, yeah, we want cheaper house prices, but do
• 0:07
  Speaker 1: we really mean it? Once you own a house, you
• 0:10
  Speaker 1: usually have a mortgage on it. The less your house
• 0:12
  Speaker 1: is worth, the less equity you have, your net worth
• 0:15
  Speaker 1: goes backwards. In New Zealand, half of the average household's
• 0:20
  Speaker 1: wealth is land and property. So half of what we're
• 0:22
  Speaker 1: worth is our land and our property. That is now 1.9%
• 0:27
  Speaker 1: less today than it was a year ago. Backwards. Overall,
• 0:30
  Speaker 1: household wealth in this country has basically been flat for
• 0:33
  Speaker 1: four years. That means we're not getting richer and we're
• 0:36
  Speaker 1: not feeling richer, and it's because house prices have been soft.
• 0:40
  Speaker 1: Is that what you want more of? This election, there
• 0:43
  Speaker 1: are parties planning to tax those assets from capital gains
• 0:46
  Speaker 1: to land taxes. That is likely to mean even lower prices.
• 0:50
  Speaker 1: When this happens... We all get a bit worried about
• 0:53
  Speaker 1: our situation in life. We get a bit gun-shy with
• 0:56
  Speaker 1: the debit card. We stop buying stuff. We're less confident.
• 0:58
  Speaker 1: The economy slows down as a result. Again, is this
• 1:02
  Speaker 1: what we really want? Now, I know what you're thinking.
• 1:05
  Speaker 1: That's all fine, unless you're trying to buy a house.
• 1:09
  Speaker 1: Don't be rude, which is fair, except that house prices
• 1:12
  Speaker 1: are now the cheapest they have been in a decade.
• 1:15
  Speaker 1: Cotality says the national house value has dropped to 6.7
• 1:18
  Speaker 1: times income in 2021. it was nearly 10 times your income.
• 1:25
  Speaker 1: In Auckland, you basically can't sell an apartment or a
• 1:28
  Speaker 1: townhouse for love nor money, and the question now is
• 1:31
  Speaker 1: how low is too low for you?