In March 2018, home ownership was at its lowest level in almost 70 years. Since then, the average price has almost doubled and the rent has increased by a quarter. stuff From the ladder Series talks with those who are priced out of the market.
Hayden Taylor decided it was time to take the plunge into the real estate market when his landlord announced last year that the rent would rise by $ 50 a week even though the house was in worse shape than when he moved in .
“At that point, I was like … I need to buy a house,” he said.
It quickly became apparent that he couldn’t afford to shop in Wellington, but the 29-year-old’s savings, KiwiSaver, and eligibility for a KiwiSaver Home Start Grant meant he could afford it somewhere in Kāpiti.
When he reached out to a banker, he was told that he would find buying a lot easier if he was in a relationship or with friends.
“When I was told these were my options, I realized that it was so bad now that I would have to rely on other people around me to just buy my first home and my landlord no longer a third of my income to pay. ”
Taylor is an account manager for a consumer electronics company and a member of the Renters United advocacy group.
He’s worked since he was 16, but he’s part of a growing cohort of individuals excluded from the market.
Singletons increasingly cannot afford a home
stuff Housing Affordability Dashboard monitors how much households need to bail their first home and how long the average household has to save before they have enough bail.
In January alone, the time span increased by 17 weeks to 238 weeks, and the average 14-day mortgage repayment for a household rose by $ 55 to $ 933.
The picture is even worse for people who typically earn half the income of the average household.
Since the 1990s, the number of young people living in a home rather than a rental property has also decreased.
In 1991, 61 percent of 25 to 29 year olds lived in an owner-occupied home. By 2018, according to Stats NZ, this had fallen to 44 percent.
The 30- to 34-year-olds and the 35- to 39-year-olds recorded a greater decline in the number of people living in their own four walls, which fell from 72 to 51 percent and from 79 to 59 percent, respectively.
Price out of the market in three weeks
Taylor’s hunt for a property was put on hold during Covid-19’s initial lockdown.
When the alert level subsided, he began looking again, but watched helplessly as prices went up Reserve Bank scrapped loan to value ratios (LVRs)) on April 30th and banks took advantage of it Record low interest rates Distribute mortgages.
“I let the ball out of my hand and three weeks later, by that point, I was already priced out. From then on I just kept looking and the longer I left it the worse it got to the point where I just stopped looking.
“I live in an apartment with three other people and two of them also wanted to buy houses alone or with their siblings, and at this point we don’t even talk about it in the house because it’s just a taboo subject. We just get depressed. “
The system “could not maintain access to housing”
Housing researcher Dr. Kay Saville-Smith said the housing system failed to maintain people’s access in three ways: “They don’t have access to safe, long-term credit and affordable housing to buy, and often they do with education-related loans. “
Saville-Smith said mortgage brokers would tend to recommend to singletons that it was easier to buy in a relationship or as part of a group as it increases income and decreases risk.
“In today’s world where both partners are mostly busy, the risk to the bank is reduced because there is someone to take on the debt if you drop.”
Taylor said he wanted housing to be treated by lawmakers no longer as a commodity, but as a human right from which no kiwifruit should be excluded.
“My reasons for wanting to buy a house are like most people’s. Security and stability.
“I got tired of using a third of my income as the income of my landlord, who owns more than ten houses.”
“For people like me, life prospects are stagnant, and stagnation means that it is actually going backwards as the cost of living continues to rise.”
“I’m not even in the worst position out there.
“I’m lucky because I have good savings and a good job.
“It looks worse for people a few years younger than me.”