1 Million New Zealanders Excluded from Homeownership Dream1 Million New Zealanders Excluded from Homeownership Dream Consumer NZ research from July 2024 reveals a sobering statistic: 60% of non-homeowners in New Zealand believe buying a home is beyond their financial reach. This finding aligns with a report by Deloitte this month, indicating that the percentage of homeowners in New Zealand has plummeted to below 60%, a record low since 1945. Gemma Rasmussen, head of research and advocacy at Consumer NZ, expresses concern over the declining homeownership rates, emphasizing their implications for consumers. Their survey found that 41% of non-homeowners feel totally excluded from the market, while 19% indicate frustration in keeping up with the rising costs. Factors Inhibiting Homeownership Several factors contribute to the shrinking prospects of homeownership in New Zealand. A post-pandemic housing boom fueled by low interest rates and high investment returns led to increased home purchases. Coupled with low housing stock and escalating inflation and mortgage rates, the country has witnessed the most significant decline in housing affordability in decades. Additionally, rising insurance costs due to unpredictable weather, energy costs, and municipal property taxes continue to drive up home prices. Challenges Faced by Renters Gemma Rasmussen highlights the instability faced by tenants, noting that 65% of those surveyed had resided in their current rental property for four years or less. This impermanence creates difficulties for families seeking to establish educational continuity and for older New Zealanders with limited incomes. Moreover, rental standards raise concerns, with approximately a third of tenants experiencing dampness and mold issues and 21% struggling to afford adequate heating for their homes. Importance of Renter Protections As the renter population potentially grows, Rasmussen emphasizes the need for robust tenancy laws that safeguard renters’ rights. All New Zealanders deserve access to safe and healthy housing, along with some assurance about their future. The article underscores the urgent need to address the housing crisis and ensure that homeownership remains possible for all New Zealanders, while also providing necessary protections for renters.
Consumer NZ research from July 2024 found that 60 percent of non-homeowners feel buying a home is out of their budget.
This is according to a report published by Deloitte this month, which shows that the percentage of homeowners in New Zealand has fallen to below 60 percent, the lowest level since 1945.
Gemma Rasmussen, head of research and advocacy at Consumer NZ, says declining home ownership in Aotearoa has worrying implications for consumers.
Our representative national survey found that 41 percent of non-homeowners say they are completely locked out, while 19 percent say they were saving for a down payment but couldn’t keep up with the market.
“We estimate that 1 million New Zealanders feel that renting is their only option,” says Gemma.
“Those living in Nelson and the Bay of Plenty feel the most left out of the housing market, while 40 to 49 year olds are the most likely to have lost hope of ever buying a home.”
“There are a number of factors that have contributed to the declining prospects for home ownership. A post-Covid house price boom saw many people buying homes because of the low interest rates and high returns on investment.
“When you combine that with low housing stock, followed by inflation and rising mortgage rates, we are looking at the biggest deterioration in housing affordability in Aotearoa in decades,” Gemma says.
Unfortunately, we likely won’t see much relief as insurance costs rise due to unpredictable weather, rising energy costs, and rising municipal property taxes, all of which drive up home prices.
“This puts real estate in the hands of fewer people across the country, eroding the age-old concept of home ownership as a rite of passage.”
If renting is your only option
Gemma says tenants face a lot of instability, with 65 percent of tenants surveyed saying they had been in their rental home for 4 years or less.
“The temporary nature of renting is not convenient for families who want to send their children to a local school, or for older New Zealanders on limited incomes.
“Any move can contribute to feelings of instability and vulnerability,” says Gemma.
Rental standards are also a cause for concern: around a third of tenants experience damp and mould problems, while 21 percent indicate that they cannot afford to heat their homes adequately.
“With a large and potentially growing number of renters, it is important that our tenancy laws provide the right protections for renters. All New Zealanders deserve to live in a healthy and safe home and have some certainty about their future.”
The post SunLive – 1 million New Zealanders locked out of homeowners’ club first appeared on Frugals ca.
