Wednesday 11 January, 2017

Property Institute warns of ‘generational disaster’ from slide in home ownership rates

Property Institute Chief Executive Ashley Church says that news of a continuing slide in home ownership rates is a disaster in the making and ‘threatens the fundamentals of what it means to be a kiwi’.

Yesterday Statistics New Zealand released figures showing that, of the 1.8 million homes in New Zealand, 1.2m (63.2%) were owner-occupied in December 2016 - the lowest figure since the 61.2% recorded in the 1951 Census. Over the same period the number of renters has increased to nearly 605,000.

Mr Church says that this situation has developed for a variety of reasons – but he saves his harshest criticism for the Reserve Bank. He says the Banks policies have made it almost impossible for first home buyers to get into their first home and risk locking in a fundamental social change that will effect kiwis for a generation.

“The Reserve Banks Loan-To-Value Ratios have totally missed the mark and have treated first home buyers as expendable fodder on the alter of a misguided economic and social experiment.”

Mr Church says that the generational impact of closing kiwis out of the housing market has huge knock on effects.

“It isn’t just about the value of the house as an asset – it’s also about what you can do with that house. Mums and Dads use the equity in their homes to buy businesses, fund further education, fund their retirement and help out their kids. Those options won’t be available for kiwis who aren’t able to buy a home and it’s a disaster waiting to happen – not just for the individuals effected – but for the economy as a whole”.

“There’s also the impact on communities, from a generation of renters, who won’t have the same ownership stake in the places where they live. That’s bad news for our Kiwi culture.”

Ends

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