How many coffees is a house?

RadioNZ have How many years would you have to skip coffee to save enough to buy a house?

The story correctly says (a) a lot, even if house prices didn’t go up, and (b) that’s not really the question.

There’s one point they miss  which is important to a lot of the narrative on house prices and saving (perhaps because this is a personal finance article, not a housing prices article).

The reason for housing unaffordability isn’t that Kiwis aren’t spending enough on housing.  You could imagine a world where housing was readily available and affordable, but people in general, or some group of people, couldn’t buy houses because they were spending all their money on beer and holidays and not saving anything for a deposit. In a world like that, advising people to save might be useful (if they listened).

That’s not the problem in New Zealand.  Kiwis, collectively, are spending far too much on housing. If one person gave up coffee or avocado toast  to save faster it might help them a little bit.  If we collectively gave up coffee and avocado toast to save faster, housing prices would just increase faster to compensate.

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