PROPERTY FOR SALE
Ranch-style home on set-back section, 3 bedrooms/2 bathrooms. Kitchen has view to heated pool and private outdoor area. Deck on multiple levels. Kitchen has double oven, glass cooktop and microwave. Master bedroom has private outdoor access. Main bathroom has jetted tub, his/hers shower heads & double vanity. Several floor to ceiling picture windows let in the natural light, garage with entry from house Established neighbourhood close to city centre.
So much for the real estate agent’s blurb. Given the median price of an Auckland home has now topped $810,000 while the average figure is even higher at more than $950,000, this property sells itself.
There has to be a catch. And there is one – and a rather large one. This house is in Austin, a city in Texas with a population of around one million people.
So what’s the point of all this? Making comparisons with other countries can be highly invalid. But pictures can tell a lot of stories. And the pictures above are really telling.
The price above is not American dollars. It is the New Zealand dollar equivalent of the listed price of US399,000.
There is some downside. Property taxes for this home – basically the equivalent of local body rates – are more thanNZ$11,000 per annum on current evaluations. If the property is Subsequently sold-on, then the sale could be subject to a capital gains tax depending on the size of any profit and other factors pertaining to the United States horrendously complex tax system.
There is nothing out of the ordinary about this house, however.You can find hundreds like it across Austin on real estate agents’ sites. And Austin was just picked at random.
If you were willing to fork out the equivalent of the Auckland median price, you would be on a whole new level again.
Why suburban American houses are cheaper than New Zealand ones is not immediately clear. Like Auckland, there is a shortage of skilled labour, such as carpenters. But there might be fewer restrictions on what kind of land can be used for building houses. Construction materials are likely to be cheaper. And, significantly, property prices have taken some years to recover following the slump which was part of the global financial crisis. However, Chinese investment in American real estate is mushrooming.
Does the following sound familiar?
Austin officials are quoted as saying house supply shortages have reached critical levels throughout the region.
They say the number of affordable-priced homes are becoming smaller and father away from jobs, with homebuyers now looking at homes an hour or more outside The city.
However, the increase in the median price of Austin houses is a lot slower than the rampant rate of the Auckland market. The median rate in Austin has risen from around $US175,000 to nearly $300,000 currently. In the same period, the median wage has climbed far more slowly, from around US$70,000 to about US$95,000.
But, again, the photos tell the story. There is something radically wrong with Auckland house prices – as if you if don’t know already.