The Deeper Effects of Home Ownership

One of the questions I asked everyone I interviewed in my Lay of the Land study was: “if there’s an us and a them in New Zealand now, who is us and who is them?” Mostly the answers reflected concerns about inequality and often that is seen in terms of home ownership.

The people I interviewed across the region ranged in housing status from adult children still living in their parents’ home to those involved in mega million dollar property deals.

As a generalisation, under the age of 30, the key aspect that mattered about their home was who they were living with, but rent costs also preoccupied the city dwellers and safety was a primary issue in some poorer P-riddled neighbourhoods.

The happiest were people who found themselves living in places they liked with people they loved, often being close to nature – whether you wanted to cycle, ride, walk or roar through it in a 4 wheel drive.

In terms of housing, the right property at the right time leads to immense social satisfaction. Most satisfied were those who had the right home for their stage of life – a lifestyle block with ponies for a noisy family of happy sporty kids, a first home buyer with a husband and two little kids and now no spare cash, but happy on a shoestring and finally not having to worry about a kid kicking a wall.

Contrast those upbeat stories with the experience of a Porirua man I interviewed who once got his back door kicked in by people seeking money for drugs, because they didn’t realise he’d been burgled so many times he no longer locked his front door. Sounds funny. Isn’t.

Some had moved further to gain satisfaction: refugees from Auckland finding like-minded people in country towns, or commuters doing a design and build more than an hour from the city. Transportation is a critical element in their decision. That, and workplace flexibility.

Clever or Lucky: How to Achieve Home Ownership

There were people who had been lucky – buying and/or selling at the right time – sometimes repeatedly, house-sitting the same home for four years in a desirable central location, taking over the family home and modernising it, or buying a home and income property.

Then there were the clever ones – good with money – like the couple who had met at school, bought early, done up homes, kept the best to rent out and moved on to the next. They bristled at any suggestion that they were LUCKY to have their property portfolio – and yet – their timing had been pretty fortunate. They’d hit the wave at the right moment.

Unforeseen changes worked against the the couple who’d sold up to go overseas and spent years trying to get back what they hadn’t realised they’d had, or the multiple groups of people who had drifted around living life, only to find themselves in their 40’s with a little kid, a broken relationship and no assets – but at least a family to support them as they started over.

There were many examples of inter-generational support in all of this – surprise inheritances from childless uncles, parental [or grandparental] lending to property sharing and childcare. One mum and dad had moved across country to provide a home for their daughter and beloved grand-daughter.

Alternative Scenarios

Have you heard of Sarah Beeny – the British property guru with the posh husky voice and surprisingly real appearance? She recently hosted a programme called How to Live Mortgage-free on Channel 4, which looked at different ways people could get around the conventional 20 or 30 year mortgage route to home ownership.

The examples ranged from council schemes to rejuvenate brown field sites or derelict housing, to individuals building or renovating house boats, tiny houses on trailers, container houses, garage or shed conversions and of course, to accelerated mortgage repayment – basically eating beans and rice for 10 years to reduce your total interest payouts by half.

In my 2018 Lay of the Land study, housing affordability is the most important issue for New Zealand. There has been a lot of economic-led response to the massive rise in home values in Auckland and now New Zealand as a whole, but not very much of a social focus.

So much of what the government has done over the years to cool the housing market has helped home lenders as much or more than the residents of this country — improving their debt portfolios and lowering their risk. But with housing costs rising faster than incomes  there’s  increasing personal financial stress amongst borrowers and others are shut out from home ownership completely.

So far, little has been done for the growing pool of renters that inevitably results.  Isn’t it better to have a country with a healthy productive workforce than stark divisions between the haves and the have nots? Whatever side of it they’re on, New Zealanders I’ve interviewed certainly don’t like the gap.

We need to think about what it takes to create housing wellbeing, regardless of a person’s asset situation. Rather than encouraging ownership of a fabulous four bed two bath with butler’s pantry like you see on The Block, it’s infinitely more useful to set our sights on helping people to live happily and safely, close to people and places they love, with enough autonomy and security of tenure that their kids can go to the same [good] school throughout their childhood, and they can participate in a community of like-minded people, without fear.

Why is that too much to ask?

[This blog post was originally a newsletter to the Windshift Network. To join the network and get my monthly newsletters, well in advance of publication on this website, please subscribe below.]

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