Generation Rent - the renters who want homes
Generation Rent - that is how one economist is labelling the increasing number of young New Zealanders locked out of the home ownership dream.
Economist Shamubeel Eaqub says the census figures tell the story - Kiwis in their 30s, the age at which many start to think about having a family, are increasingly stuck in rental accommodation.
READ MORE: Why renting is the new owning
While a drop in home ownership has occurred across all age groups, from those in their 20s to those in their 70s, the largest falls are for those in their 30s and 40s. In 2013, 43 percent of people aged 30–39 years owned their home – down from 54.6 percent in 2001. That figure is just 36 per cent for those in their early 30s. For those in their 40s, 60.8 percent owned their home in 2013, down from 71.5 percent in 2001.
Eaqub's upcoming book Generation Rent charts the death of the Kiwi dream of home ownership.
"In the last census we had 52 per cent of New Zealand individuals over the age of 15 who lived in a rental property. The balance has shifted from a property owning majority to a renting majority in New Zealand. Why we want to fix the issues around housing is not to do with economic and financial stability, but to do with social stability."
The Government has been careful to dampen down expectations of any big new sweeteners for aspiring home owners in Thursday's Budget. But it has announced a series of moves in recent times in recognition of the rising national angst about the number of young Kiwis locked out of their first home by soaring prices in Auckland and static incomes elsewhere.
They have included a boost to first home buyer grants, widening the eligibility of the Government-backed Welcome Home loan scheme and fast-tracking of housing areas to boost supply. On Sunday, Prime Minister John Key also announced tax changes to clamp down on property speculators and overseas buyers in a bid to take some of the heat out of the Auckland housing market.
Finance Minister Bill English has signalled further modest measures in the Budget are likely, including freeing up more Crown-owned land for building affordable housing. The Government could underwrite some of those projects, further boosting supply.
Eaqub said the Government was moving in the right direction but the issues in the housing market had been brewing for 2-1/2 decades so would take time to fix.
Many of those issues were just as critical to the rest of the country as Auckland, even though property prices in other centres like Wellington had been "going sideways" while Auckland soared.
Those issues included rules and regulations affecting land supply, district planning, the Resource Management Act, funding for infrastructure and other long term constraints which were currently driving the property bubble in Auckland.
But there was also "madness" to the current frenzy in Auckland, and no one knew how it might end, Eaqub said.
"If we knew we would all be very rich...usually these things tend to end when there is a shock of some sort. Quite often it will be an increase in interest rates, an external shock from a slowing global economy that flows through to job losses, that sort of stuff.
"We can't see anything immediately on the horizon but we also know that the economy in China is slowing fairly quickly right now, the economy in Australia is slowing, our economy is slowing from the impact of [lower] commodity prices and the [Canterbury] rebuild is getting close to its peak.
"So there are some issues on the horizon but it's hard to see what will top the juggernaut in Auckland."