Home ownership not my reality now or possibly ever
OPINION: "Why would you kill yourself with debt if you don't need to?"
This was not the response I was expecting when talking to a mortgage broker about whether I would ever own a home. I had been told by a colleague anyone should be able to afford a home if they put their mind to it and was beginning to feel like a failure for not having achieved home ownership.
I've read the plethora of articles about people getting a step up on the property ladder, held up as beacons of hope to those of us who haven't even put a foot on the first rung.
Many of the examples live in the regions, have had loans from their families, started saving when they were teenagers, live overseas or were lucky enough to buy a home before the prices skyrocketed. But what happens when you have to start over in your mid-30s?
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THE D WORD
Life changed for me in 2016 after a series of events which I now refer to 'that time my life fell apart'. It started with a work situation that had become increasingly toxic. It was a 'good' job in corporate communications but when it started to impact on my health I knew it was time to leave. Within a month my marriage ended and as I didn't have an income I moved in with a friend who let me stay with her rent free.
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My savings were rapidly dwindling and with no job in sight I turned to WINZ for assistance. After telling my case worker my situation I was told I was probably too fragile to be working and shouldn't for a few months. I would be given around $200 to survive in Auckland.
She was probably right. I was emotionally raw and trying to come to terms with my situation. But I could not see how I could survive in Auckland on $200 and in reality I did not have the luxury of spending months not working.
So I found a job. It didn't last long, I wasn't ready to return to work and struggled to cope with the demands of the corporate world.
I am lucky I am resourceful; I was able to reach out to old contacts and started to pick up work. Slowly. Oh so slowly, life began to look up.
"The cost of divorce is painful, hardly anyone comes out OK."
John Bolton, Managing Director for Squirrel Group, points out the end of a marriage isn't easy for either party.
This has been my experience. I never quite recovered financially. I'd spent all my savings during the few months after the initial separation and now saving can be a struggle. I've returned to an industry that I love but does not pay the same as a corporate job. And going from two incomes to one is an adjustment. All of my living expenses have gone up, I pay more in rent, and food prices seem to increase over the months.
Bolton said many people in major metropolitan centres face the dilemma of living in an expensive area they might not be able to afford to buy a home in.
"You need to ask yourself, 'why do you want to buy a home? What would you benefit from it?'"
I've given him a brief rundown of my income and circumstances. First he suggests a career change: there's no way I'll buy a house in Auckland by myself on my income.
"If you can't afford it, don't worry about."
That's Bolton's advice when I tell him I've sacrificed a bigger pay packet for work satisfaction.
I don't live an extravagant life. I don't drink, or go out to fancy restaurants for dinner. Sometimes I take myself out for brunch but I don't buy smashed avocado. I can't remember the last time I bought new clothes and I try and save a little from each pay.
What will my future look like if I don't own a home?
Someone suggested to me I should set my sights on buying a home outside of Auckland. I can see the rationale for this: houses are certainly cheaper out of my hometown.
The problem is my life is here. For a single person it's important to have your support network around you. As the childless aunt, I can help out my sisters when they need and with parents nearing their 70s, it's important for me to be in the same city. Without my support network, I could have had a very different outcome to the challenges I faced last year. I understand now how people fall through the cracks.
Bolton is quite excited when I tell him I've lived in the same rental unit for eight years. "Stay there!"
He tells me buying out of Auckland won't necessarily be a cheaper option for me because I'll still be saddled with debt.
"My advice to you is to focus on building up $200,000-$300,000 in your Kiwisaver and that will supplement your pension."
Or I might enter into another long-term relationship which could change things. As I point out to Bolton, I'm not on the shelf just yet.
"But for now, live in the moment and enjoy it."