The housing journalism can’t stop interpreting why housing is so expensive. Unfortunately I can’t see they looking at the roots.  Everybody who is looking for a place to live already knows New Zealand has a widespread housing shortage and that is even worse than the journalism about housing un-affordability.

Housing affordability - the economists are on the topic, followed by reports from Massey University and the public opinion like somebody (I think it was Gary McCormack on the radio, can’t remember), he said if the government can’t bring down house prices then “the democracy is stuffed”. Well, I think you are stuffed if you live in the “red zone” in Christchurch or you are the owner of a “leaking home”.

When it comes to housing as landlord I know what I talk about. Most people know that living in a house became expensive and it doesn’t matter as owner or tenant, the occupier pays for the running costs.

The purchase price or market value is what the home-buyer is willing to pay. That price depends on his income and the interest rates he can afford. How many buyers compete is controlled by supply and demand – right?

Many buyers agree that housing is “overpriced”, saying they paid too much for a shelter that is cold and damp, nowadays insulated but leaking and is low value for money. Well, that isn’t the good news either.

So, will the building costs go down in future or are they driven up by inflation? Certainly, you know the answer. But what is with all the other related costs like legal compliance cost, land values (and related City Council levies), and legal fees? It is obvious that driving up CVs for the purpose of increasing rates might have side effects for housing affordability. In contrast, where I grew up levies were based on the size of land and the services provided, were approximately a fifth of the market value and not exposed to sales statistics.

By the way, since 2007 the property CVs went down slightly and I asked the City Council why my rates are still going up. Interestingly the answer came from the City Council's lawyer – but that is another story.

As you can see the affordability of housing is a figure between purchase price and income - right? If you increase your income at the same the affordability gets better.

Regarding building costs we haven’t looked at the global driven and local costs for material. Let us have a look at the transportation of building material. For instance, we pay with higher petrol prices higher petrol tax and on top of it even more for GST and finally the sale price for a product includes again GST. I have seen the percentage of taxes we pay – they are absolutely huge compared with figures for wages and related expenses.

What then is the good news?

By reading so far, you have realized there is neither good news nor a quick fix to this problem. Get real and stop applauding to the "paid" real estate journalism. Why should it matter to you that the index of after-tax annual income to house price ratio is in US around 3, or Britain 5.1. You live in New Zealand and housing is even more expensive. Fresh air has its price or similar. If you want to get onto the property ladder start saving, get a better paid job and do some part-time work. It won’t get better as it is. Good luck.

Klauster