A home of our own?

Is owning their own home a reality for families these days?

The two groups that spent time discussing home ownership (Royal Oak and Dargaville) thought that this is currently beyond the reach of many New Zealand families. Indeed some participants thought that the idea that everyone can afford a home of their own has actually always been a myth. In the Royal Oak group nine participants owned their own home but the remaining two had found this impossible because house prices in Auckland are so high.

“My husband worked out that if the house price is more than three times our total annual salary then it would not be affordable for us to buy” (Royal Oak participant)

The Royal Oak group said that house prices have risen so rapidly in Auckland that to buy an adequate house the right size for your family is not viable.

‘One person commented that they had recently (within the past few years) bought a house with a 100% mortgage. Now they have two children and would like to have a third, but feel their house would not be big enough’ (Royal Oak group feedback)

In Dargaville, where prices are not so high, participants who had fulfilled ‘the dream of owning a house’ had done so not so much by raising a deposit but by using a windfall (e.g. an inheritance or tax rebate) or by getting a no-deposit loan. They believed that rising house prices, together with the rising cost of food and other costs like insurance, meant that many families will at best have to postpone buying a first home.

Participants thought that the ‘Kiwi dream/expectation to own your own house’ was still so strong because it gave a sense of security and control - you could do your own alterations and there were financial benefits. Even with high interest rates and the current dip in the market they believed that house prices would rise again. The Royal Oak group believed ‘you could still make a capital gain by holding onto your house’.

On the other hand, renting was often problematic. There was always the possibility that you might have to move out, for example if the landlord sold the house. This causes upheaval in a family’s life. Also rents are high, especially in Auckland.

‘The cost of renting in Auckland on a low income is a major concern, even for those who live with family. Only one parent was living in a Housing New Zealand property. There was a common agreement that the cost of rent caused high stress for the parents on a weekly basis’. (Grey Lynn group feedback)