Housing retail, rental markets changing
A number of factors are contributing to fewer people owning their own homes in New Zealand, according to real estate agents.
Data from the 2013 census shows home ownership has dropped below the 50 per cent level.
The biggest drop in ownership was for people in their 30s, dropping from 50 per cent in 2006 to 43 per cent last year.
Lodge Real Estate Hamilton managing director Jeremy O'Rourke said he hadn't noticed a major shift in demographics of home buyers over the last seven years, but that a number of things were contributing to the statistics.
"There's a lot of dynamics to that number," he said.
"What we have seen is a growing number of properties put into trusts from that age group."
The overall number of houses in family trusts for all age groups increased two per cent from 2006 to 2013.
O'Rourke said people are also staying in rental properties longer.
The annual turnover of rentals - the number of rental properties that change tenants - for Lodge Real Estate Hamilton was around 80 per cent in seven years ago. Now it is around 50 per cent.
O'Rourke said the statistics for Lodge may be an extreme example, but "certainly that is a trend in the industry".
This might indicate that people are choosing to rent for longer instead of buying their first home.
More first home buyers are purchasing in upmarket locations, indicating they are waiting longer to make their first purchase.
"We've seen a lot of first home buyers at a later age going into Flagstaff or Rototuna."
First home buyers have historically been focused on cheaper suburbs such as Dinsdale and Nawton.
"We're actually unsure if it's people saving longer in New Zealand, or if it's repatriated funds."
O'Rourke said people are also renting better homes, which may increase their required standards for a first home purchase.
"What people want to live in is changing," he said. "Your first home ownership step is often something akin to what you've become used to."
Census data shows the number of households paying high rent has dramatically increased while the number of households paying low rent has decreased.
The number of households paying over $500 per week more than tripled from 2006 to 2013.
Harcourts Hamilton general manager Brian King said as house prices increase it could be harder for younger buyers to save for a deposit. This could mean the average age of first home buyers is increasing.
"I also think a lot of that age group are doing their big OEs, then coming back to settle.
"It takes a bit longer to get into a deposit situation."
He said increasing student debts may also be affecting young would-be home buyers.
King said the age of first home buyers would continue to rise as new LVR (loan-to-value ratio) caps begin to have an effect.
The caps were introduced last year and are not reflected in current census data.
RENT OR OWN: A MATTER OF MONEY
Some like the freedom of renting but many tenants dream of owning their own home. Aimie Cronin talks to renters.
Christina Mackenzie is a dreamer of the Kiwi dream and it goes like this.
A three to four-bedroom home on its own section, fully fenced, a basketball hoop, a small cricket patch, space for add-ons in case the grandchildren come to stay one day. She calls it the forever home.
She is 25 and married with two children and the combined income in her household is about $110,000. But she has only recently gone back to work after having number two and debt has lingered from the single-income stretch. It is back to square one before saving, so home ownership is a long-term plan.
She reckons it will take five to eight years to come anywhere near close enough to a 20 per cent deposit.
"Even then our savings might not go on a house because the banks might up the rules again."
The family would rather rent than downgrade to a shoddy house.
They moved to Dinsdale last year and live in a neat and tidy three-bedroom stand-alone. They like the neighbourhood and want to buy there one day. The rent is $360 a week. Things break and there is a wait before the landlord comes to fix them.
Rules are no new picture holes in the walls, it is as is where is, there is no basketball hoop, no cricket patch.
Her oldest son, Connor, knows these limitations - he has known the word landlord since he has known words.
That is the worst part about renting, says his mum.
"The forever home is the one I want for Connor. I want him to have a place to build memories, because his memories now are split between places and none of them have been his."
Nigel Sutcliffe wants to build his dream home, not own someone else's. But he is a happy renter for the time being.
He lives with his partner, Michael Hewin, in a two-bedroom stand-alone house with a big section. They pay $290 a week and both walk to work. The couple earn under $100,000 a year and would like to be in a better financial situation before they buy, but they also like the lifestyle that renting affords them.
A bit of shopping, a bit of wine, Chim Choo Ree every now and then.
"I think a lot of people say I've gotta buy a house, I've gotta buy a house - well, you don't need to buy a house, because you can comfortably rent houses at a lot less stress.
"You can rent a nice house and be quite happy there for as long as you want.
"For us, it's convenient." He thinks they will visit the bank in the next couple of years and says the current landlord has offered to sell the property to them, so it is whether he can hold off on the dream build. "We're just giving it some time, there's no need to panic."
Tania Robinson sounds almost panicked when talking about home ownership.
She is 32 and newly married, and says buying a house is one of those things that is way down the track. It is part of the three to 10-year plan - "we haven't really put a time frame on it" - any savings now are spent on travel not bricks-and-mortar.
The couple rent a stand-alone, two-bedroom Lockwood in Te Awamutu and occasionally talk about buying a house, she laughs. "I think it's assumed we will eventually." Husband Luke is from Britain and the plan is the next trip will be in that direction. "If you want to travel around, it's not ideal to have all your money tied up in a house."
Shannon Kelly and her partner, Michael Dargaville, want to travel with their two children. And own a home. But not for a long while yet.
At the moment they spend everything they have on daily life.
The couple are both 31. She works as a community adviser and he is a stay-at-home dad (their two children are under 2) and he does the odd night shift as a security guard in town. She earns less than $50,000.
They cannot afford insurance. If she thought about what she would need for a deposit on a $250,000 house, that is more money than she could ever imagine having. Ever.
As things are, saving is not an option.
But she squirrels. Twenty or thirty dollars per payday to put into an emergency fund. "Every year it's used up and I squirrel it, and it's used up and I squirrel it, and that's fine.
"It means we don't have to rely on the government and we don't have to worry."
The couple pay $332 in rent for a three-bedroom stand-alone in Hamilton East.
It has a front yard and a garage.
They have been tenants for the same landlord for eight years.
"I keep thinking, far out, we've paid this guy's mortgage," says Kelly.
But he is one of the good ones. He put a heat pump in and sends texts to make sure the place is working properly and that the family are warm.
The only way Kelly can see owning a home is if another family moved in with them and while she would consider that, she is also aware that a mortgage would limit options for her family. Things would be tighter. Travel would be out.
She plans to have more children and would rather sacrifice home ownership to grow the family.
"Putting finances into a home doesn't blend with the idea of having freedom.
"It feels like a rope around the neck."