The NZ media regularly quotes economists commenting on house prices & affordability. Often they compare house prices to incomes. This kind of reporting ignores one huge issue. A house built in 2010 is a lot more than just a house! When we take an objective look at an "average" new home being built on the North Shore over the last 50 years, it becomes obvious things have changed hugely.

Back in the 1960’s the average new home was probably a weather board 95 sq meter one level home on a full site. It would boast 3 bedrooms (often with the 3^{rd bedroom really only a baby room). There would be no insulation, one power point per room, wooden joinery and a basic kitchen. The laundry sink was a concrete tub.}

Interestingly – this was similar to the comparables over many decades prior. The only real difference lay in the location where new building was occurring and architectural style….

However, in the subsequent 50 years – house building technology and what we expect from a home has changed hugely.

In the 1990’s the average new home was already very different. I picture a 195 sq meter, 4 double bedroom, double story home with double internal garage. It would feature automatic garage door openers, alarm, dishwasher, ceramic top stove with rangehood over, wall & ceiling insulation (of varying quality). There would be several power points and light fittings per room, several phone connection points and several aerial outlets. The two bathrooms would offer a heated towel rail and heat lights with fan. Wardrobes & laundries had organisers built in. Gardens were planted and fences in place

In 2010, we are selling new homes of say 300 sq meters. They are typically again 4 or 5 bedroom, double story homes but now with a lot more space and more amenities. The double internal access garage with auto doors is still standard. In fact, all the above mentioned fittings are present – but they are now stainless steel & include a fitted double width fridge/freezer (with all mod cons). In addition, there is an upgrade to superior insulation, double glazed windows, 3 tiled bathrooms with under floor heating. Heating is now by installed heat pumps (two or three). All the modern wiring is pre-installed. This often includes set up for home theatre but definitely lots of power points, expensive light fittings etc. etc. Again gardens are handed over fully planted. In addition, there will be an expensive storm water detention system (as required by council).

Whilst we looked at new homes above, the existing housing stock is actively upgraded too. Under the government insulation scheme, many homes have had insulation and heating upgraded. Almost all now come with many more appliances than they did in the past. Many will have been extended considerably (with decks, conservatories and basement conversions being the most frequent additions).

Thus when economists compare house prices to incomes – they are not comparing apples with apples. Today one is buying a lot more home, garaging, lots of appliances, fittings, garden plants etc. etc. All this is labelled "the sale price of a house"