Fewer New Zealanders own homes - census

MICHAEL FOX
Last updated 09:41 04/12/2013

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The number of Kiwis who own their homes continues to decline, and economists warn it is likely to get harder still.

New census figures released yesterday show the number of households that owned their own home or held it in trust dropped from 66.9 per cent in 2006 to 64.8 per cent this year - continuing a trend reflected in census data since 1987.

Economists say that drop is likely to increase with high and growing house prices as well as new Reserve Bank lending limits making it harder for first home buyers.

Dr Claire Matthews, from Massey University's Centre for Banking Studies, said homes were increasingly being put out of reach.

"Unless something dramatic happens to change that relativity between home prices and income then no, it's not likely to change. The reality is that unless house prices fall or if they continue to rise at the rates that they have been then it just makes it more and more difficult."

At the same time, Kiwis were holding on to their home ownership dreams and there were a lot of people "with an unsatisfied desire to own their own home".

BNZ chief economist Tony Alexander said the rate was probably decreasing further as first home buyers grappled with the new lending restrictions.

"Houses in New Zealand are relatively expensive so for somebody to get in and be a homeowner is a big ask."

Low interest rates had also probably increased investor involvement in the housing market over the census period.

New Zealanders had to accept it was hard to buy a house today, but he hoped it did not signal the end of the Kiwi dream, Mr Alexander said.

"It is, I think, definitely a part of the Kiwi psyche to own a piece of land . . . but look around the world with lots of money looking for investments and house prices generally being relatively high maybe we just have to accept a lower rate of home ownership."

Labour's housing spokesman Phil Twyford said the Kiwi dream of owning your own home was "fading fast".

"It is set to get much worse. LVR mortgage restrictions are shutting first home buyers out of the market and already cutting the supply of new builds."

But Housing Minister Nick Smith said in spite of home ownership rates decreasing since 1987, the Government could turn it around.

"I am not one that is giving up and saying this is just inevitable."

Policy settings over that period such as those around land supply and building and development costs, had been counterproductive and these were "undermining the Kiwi dream".

The Government was working to address these to make houses more affordable.

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New Zealand's rate of home ownership was around the OECD average, he said. Fairfax NZ

- Fairfax Media

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