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?”  The answers often reflected concerns about inequality, especially in terms of home ownership.

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

Right Place, Right Time

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. They were often close to nature – whether that meant you could cycle, ride, walk or roar through it in a 4 wheel drive.

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. It  looked at different ways people could get around the conventional 20 or 30 year mortgage route to home ownership.

The examples included council schemes to rejuvenate brown field sites or derelict housing. But most were individuals building or renovating house boats, tiny houses on trailers, container houses, and garage or shed conversions. A few accelerated their mortgage repayments – basically eating beans and rice for 10 years. On the plus side they did cut their total interest payouts in 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 but not very much of a social focus.

Who Benefits?

A lot of past governments’ actions  to cool the housing market helped lenders — improving their debt portfolios and risk profiles. But did it help the residents of this country?  With housing costs rising faster than incomes  there’s  increasing personal financial stress amongst borrowers. Others are shut out from home ownership completely.

So far, we have done little for the growing pool of renters that inevitably results.  Isn’t it better to have a healthy productive workforce than stark divisions between the haves and 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. Implicitly we encourage ownership of fabulous four bed two bath with butler’s pantry homes like you see on The Block. But it’s infinitely more useful to set our sights on helping people to live happily and safely. It’s better if they’re 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. It’s better for all of us if they can live in a community of like-minded people, without fear.

Why is that too much to ask?

Learn More About the Lay of the Land Study

This analysis was drawn from The Lay of the Land 2018 Study.

Lay of the Land Mini Report

Go to  The Lay of the Land 2018 Mini Report page

Or check out the  Lay of the Land Mini Report Sample

 

 

[This blog post was originally a newsletter to the Windshift Network. To join the network and get my monthly newsletters, please subscribe below.]

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