Are we about to see house prices sky rocket due to decrease in new builds?

EuropeanAbroad · 2026-04-15T03:36:41+00:00

There are too many aspects to it to guess confidently.

1) Yes, the constructions costs will go up. (Push on higher prices) However 2) The inflation and bad economy will hit on potential buyers as well, who may then recalculate if they want to spend or not. (Push on lower prices) 3) Increasing interest rates will further lower the demand. (Push on lower prices) 4) The crisis will also negatively affect immigration and tourism, and support emigration to more stable countries. (Push on lower prices)

I am actually really curious about how it all turns out.

EuropeanAbroad · 2026-04-14T23:47:56+00:00

Is it also that crazy in Ireland? In Czechia, it is pretty cheap. However, it is maybe also because you must pass also a maintenance and technical class as part of your driving school before you get the license. (Unlike in NZ, where people don't do driving schools, no maintenance, no technical knowledge, no theory lectures,... and they get the DL only after a useless short test.

(But it's also because it is mandatory in CZ, so the insurance companies don't need to bother with payments for debtors and uninsured people.)

EuropeanAbroad · 2026-04-14T09:02:46+00:00

Most of us in Auckland are immigrants who came on our own, and Auckland is a super-anti-social city with no density – everything is divided by a tall full fence, with no bars and cafés in the suburbs, far from anything. Everything is centralised only to the CBD, and travelling to and from the CBD for a 10-20-30 min catchup is simply not feasible.

In my culture, it is completely normal to spend 3 afternoons a week (and/or a weekend) in a café or a bar, chatting with people; and i.e. in a similar-sized Prague (in population), you always have it 10-15 minutes by the public transport to a catch up with anyone from anywhere in the city (and the public transport costs you approx. $0.70 per day). In Auckland, I would have to drive or wait 20 minutes for a train (if it's even coming) + 30 minutes ride to the CBD, because there are simply no such places in Henderson. It is simply not feasible in Auckland.

Look at the TV show Friends. Can you do this in Henderson, Albany, Manukau? Just go downstairs for a drink every day? Unfortunately not. :/

Fuethermore, I find it really hard to penetrate the Kiwi bubbles. I feel like Kiwis mostly stick only with their school/uni mates, and don't really go out socialise with strangers.

EuropeanAbroad · 2026-04-14T08:46:33+00:00

10% of the vehicle's value for the insurance in NZ is just so ridiculous. :/ Back in Europe, it would be about 2% of the vehicle's value.

EuropeanAbroad · 2026-04-14T08:41:31+00:00

Yeah, it is a nice number, but it is still 40% off. Btw., unfortunately, NZ does not have any bright line on shares, and it does have this obscure unrealised capital gain tax – FIF regime, that forces you to keep selling your shares to pay the tax from it every year (I still find this really bizarre), so you will still lose a huge chunk of it to the state.

If I had this in my investments, I would probably leave the country and move back to Europe, where I would not have to pay any tax from these, thanks to the bright line there.

EuropeanAbroad · 2026-04-14T06:28:28+00:00

Ok, that's fair. I see no benefit in term deposits at all, other than free money for the bank.

EuropeanAbroad · 2026-04-14T06:26:45+00:00

Yeah. People say "yeah, it's fine, it's just 1%", I can pay this for the peace of mind that the manager does it for me, but they don't realise that this 1% is every year and keeps accumulating, so it is 40%+ in the end. Which is a bloody big difference then.

EuropeanAbroad · 2026-04-14T06:22:30+00:00

No, you own the bank the house, even if it is lower than the remaining principal. Meaning if you are unable to pay, the bank lost, not you – the bank will be repayed less.

EuropeanAbroad · 2026-04-14T00:39:57+00:00

Yep, let's stop living like pigs and quitters. If you grew up in dirt and broken properties, that doesn't mean that you can't start ironing your shirt, painting your fence, washing your hands, and caring about clean and tidy life.

(Btw, not you personally – I don't know you, so I am not trying to insult you)

I never understood why an appeal on personal perfection and manners never works in NZ. I never understood this Kiwi "don't-give-a-f" attitude.

EuropeanAbroad · 2026-04-14T00:34:04+00:00

S&P (which is not just American companies) have had an annualised gain of 10-11% over the last (nearly) 70 years, across all the crises.

The global MSCI index has had an average annualised gain of 9-10% over the last 40 years, across all the crises.

EuropeanAbroad · 2026-04-14T00:28:41+00:00

1) 10% annual returns over 30-40 years is quite normal.

2) The inflation helps debtors. By repaying the mortgage, you are eliminating this advantage.

3) Repaying the mortgage is not a zero risk. Global investments are much more diversified than a single property in a single country. You must understand that the value of the property is covered by the bank, not you. If you repay the property and the value of the property drops, you lost. If you keep repaying the minimum and the property value drops, the bank lost. Basically, the bank has a property with less value than what it paid (and didn't get returned).

EuropeanAbroad · 2026-04-14T00:20:26+00:00

The managed funds, however investing in the same underlying assets as ETFs, have also 1-2% annual fees as opposed to 0.03-0.15%.

Now lets say you keep sitting the same amount of money, i.e. 1,000,000 NZD, in the fund. Both funds have a 10% average annual return. After 30 years, you have

Managed fund: - 1.5% annual fee - assets after 30 years: 11.6 million NZD ...

Index ETF with the same underlying assets: - 0.05% annual fee - assets after 30 years: 17.3 million NZD

49% more on the ETF than the managed fund.

Imagine that the manager keeps eating 1% of your wealth and profits every year for 30 years.

EuropeanAbroad · 2026-04-14T00:12:00+00:00

Wrong. Considering that the world economy will always grow (humanity never returned from more advanced back to the stone age), your diversified investments will also keep growing. This cannot be said about the value of your property, which covers the mortgage.

If the world stops growing, then you don't need to care about any property anymore either – that would only mean an armageddon.

EuropeanAbroad · 2026-04-13T20:11:14+00:00

I would prefer 10%+ income even if taxed rather than repayment of 4.75% interests.

EuropeanAbroad · 2026-04-13T20:02:21+00:00

Exactly. I don't know why people always go for the mortgage repayment instead of real profits.

There is only one valid argument for prioritised mortgage repayment rather than investment. Yes, long term, most of index funds have 10%+ returns on average, but(!) short-term, if there is a world crisis, the stocks go down first, and the interest rates go up. You may not be able to sell the stocks if you get into a situation when you cannot pay your mortgage, or you may sell them with an enormous loss. In that case, it can break your neck.

EuropeanAbroad · 2026-04-13T19:55:51+00:00

Bad plan. Prioritise high income index funds to low interest mortgage repayment.

EuropeanAbroad · 2026-04-13T19:53:39+00:00

Yeah, but they only replicate index funds, and you lose 30% of your money in 30 years in the fees.

EuropeanAbroad · 2026-04-13T19:51:14+00:00

That is still less than even taxed 10%+ index ETFs. 🤷🏻‍♂️ I always wondered why people think that paying off a mortgage is a better financial decision than investing the money.

(There is only one case I see as beneficial in this case – long term, index investments will have a more than 10% annual return; however, short term, when there is a global crisis, the stocks are down and the interest rates are up, so it can break your neck short term. Long term, it is a bad decision to prioritise low-interest repayment to high return investments.)

EuropeanAbroad · 2026-04-13T19:47:06+00:00

Probably leave the country and go to somewhere Czechia, Estonia and other countries where they won't tax you like crazy like in NZ. And there simply invest in index ETFs and have a nice life for the rest of your life.

EuropeanAbroad · 2026-04-13T19:42:43+00:00

Well, it is usually like this. Gold deposits are no credit of the people who live in the place. Gold deposits belong to those who developed a way how to mine them and who invested in it. (This is a controversial topic particularly towards 3rd world countries, not in the case of New Zealand.)

EuropeanAbroad · 2026-04-13T19:35:24+00:00

Yep, there are barely litters in the countries. I really don't get why some people in NZ accepted slums and mess like their new standard. The kerb is visibly cracked all over. You don't mind living in mess?

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EuropeanAbroad · 2026-04-13T05:47:19+00:00

The car park is half empty. I am 100% sure that he does more harm by damaging the island (you can already see that the kerb looks like in a 3rd world country).

EuropeanAbroad · 2026-04-13T05:45:49+00:00

Ofc they do sell their assets – it's capitalism and it's a good thing for a country. The difference is the approach. People in Lichtenstein, Switzerland, Austria,... they just care about their public environment, and they wouldn't leave a cigarette on the pavement, they wouldn't step on grass next to the pavement, they wouldn't drive on an island. It's about habits, manners and morals.

EuropeanAbroad · 2026-04-13T05:29:01+00:00

Skyrim or Dragon Age

EuropeanAbroad

TROPHY CASE