The changing face of home ownership

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In the decades since New Zealand emerged broken and dazed from World War Two, a remarkable shift has occurred in home ownership. In 1951, only 6 years after the war came to an end, homeownership rates were at an all-time low. Only 61% of New Zealanders owned their own home and getting on the ladder was a battle. But, as the country emerged into a new era, those statistics began to change, and the Kiwi ideal of home ownership truly came to the fore.

In the late 1980s and early 1990s, home ownership in New Zealand saw a boom, hitting a peak of 73.8% ownership in 1991. While 23% of the population continued to rent, most families were living the Kiwi dream.

Fast forward 30 years and the statistics aren’t exactly rosy. In fact, home ownership levels are almost back to the post-war figures, sitting at 63.8%. Meanwhile, homeowners are expected to pay almost 6 and a half times their annual income to secure a house. Add to that, the 30-year mortgage terms that most are committing to despite being well into their 30s and it makes for sobering reading.

This infographic we put together shows just how much has changed in the battle for home ownership. And it’s a battle we’re losing.

TPC home ownership infographic (2)

 

 

It’s time to look closely at what can be done on both sides of the spectrum. How can we both improve rates of home ownership and better support tenants who are renting?

Statistics have shown that home ownership is not just a nice-to-have. It results in increased life expectancy, higher standards of living and a greater sense of wellbeing and security.[1] So how can we better improve standards for renters so they can experience the same benefits as homeowners?

The first option is one that the Government is already working on.[2] A significant overhaul of current tenancy laws has been proposed to provide a higher standard of living for tenants. They are all changes that seek to provide tenants with more security and improve their standard of living.

There is an opportunity here too for more landlords to step up, take these statistics on board and consider how they can embrace the government’s proposed changes while implementing socially conscious ideas of their own. While it is important for landlords to see a return on their investment, they are also partly responsible for the comfort, health and safety of 33% of our country’s population. As Voltaire said, ‘with great power comes great responsibility’.

In terms of home ownership, the belief system around this is seeing a significant shift in attitude and approach. Many Kiwis see that the quarter-acre dream is out of reach but are seeking out other ways to get a foot on the ladder.[3] Many first home buyers are seeking out investment properties in more affordable areas of the country so that they can still get a slice of the homeownership pie. Other buyers are teaming up with friends and family in shared ownership schemes to spread both the cost and the risk. Online startup Miuwi, the ‘Tinder’ of property investing, links first home buyers and property investors so they can pool their funds in an untraditional shared ownership scheme.[4]

At The Property Crowd, we work on both sides of the spectrum, seeking better rental standards for Kiwis as well as increased homeownership. Our crowdfunding platform gives Kiwis the chance to invest in socially responsible properties with as little as $100. Once each property has been fully invested in, the sold sign goes up. Investors will be able to sell their shares in a property at any time.

So, while the statistics around home ownership might be on a downward trend, there are passionate would-be buyers, investors and start-ups who are still pushing hard to make it a reality for every Kiwi.

The Property Crowd’s platform launches in March 2019, register your interest now and be among one of our first socially responsible crowdfunders.

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[1] Howden-Chapman, P, & Wilson, N (1999). Chapter 7 Housing and Health. In P HowdenChapman & M Tobias (eds), Social Inequalities in Health: New Zealand 1999. Wellington: Ministry of Health. PDF available from www.healthyhousing.org.nz. As Cited in https://www.stats.govt.nz/assets/Reports/Changes-in-home-ownership-patterns-19862013-Focus-on-Maori-and-Pacific-people/changes-home-ownership-maori-pacific-1986-2013.pdf

[2] https://www.tenancy.govt.nz/about-tenancy-services/news-and-events/consultation-underway-to-reform-tenancy-law/

[3] https://www.bnz.co.nz/about-us/media/2018/new-kids-on-the-block-the-changing-face-of-property-investors

[4] https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12158623

Claire Warin

Creator of social media and blog content with a particular interest in property investment for the seasoned investor

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