Property ladder: Trapped in a rent cycle
Dear Mr Key,
As a politician, I quite like you. I like how you're generally a sharp shooter and don't take bull from anybody, including that sorry excuse for an MP called Aaron Gilmore.
However, I don't like the latest announcement from the Reserve Bank, and I think as Prime Minister with a commerce degree, you might like to know why.
For the last three years, my husband and I have both been studying in New Zealand - myself in commerce and my husband in nautical science. We have both had opportunities to move offshore but have declined them because we do quite like living here.
With both of us now capped with shiny new degrees, we thought it was high time we bought a house. On a combined income of $115,000 we can certainly afford to service a mortgage. However, it seems that we cannot afford a deposit.
All we are wanting to buy is a two-bedroom, $250,000 townhouse outside of Auckland. We don't need a McMansion, and we couldn't afford one anyway. We're currently on track to have saved a $20,000 deposit by the end of August - only because we have given up our rental, given away our beloved cat, and are boarding with friends.
Imagine then my surprise when I read this morning that I will likely need a 20 per cent deposit to buy my townhouse. That means I need to save $50,000. Even on a strict budget with every spare cent going towards the savings account, that's going to take us a year. We can't board with friends forever, so will probably have to go renting again. All of a sudden, I'm looking at two years to save a house deposit.
Why, Mr Key, are you picking on people like us who just want to own our own homes? I'm sick of paying $17,000 a year to live in a cold, damp house in Manurewa while my parents' generation leverage yet another house as an "investment". I hate the constant inspections, the inability to change a home to suit our circumstances, and living at the beck and call of an unscrupulous landlord.
I have a finance degree. I know that this country needs capital investment to survive in the long term. But I also know that people like me can't invest while we are trapped in a vicious rental cycle, unable to own our own homes.
Please, take a good hard look at the younger generation. We want to own our own homes - please stop putting roadblocks in our way.