Homeownership in New Zealand is at its lowest rate in almost 80 years and is set to drop further, new numbers say.
A new report, authored by Deloitte and commissioned by Westpac, shows ownership rates have dropped below 60% — the lowest since 1945.
Since the 1990s, the rate of home ownership has dropped by more than 15%, and it is forecast to drop another 10% by 2048, according to the report.
“We’re now at a point where your family has to be rich to get into the housing market, or you have to be lucky enough to marry into wealth,” economics commentator Bernard Hickey said.
The report outlines how nearly half of all renters spend more than 30% of their disposable income on rent, making it harder to save for a deposit.
“The cost of homes versus what we earn also makes it pretty challenging too, and so what that means is we need to start to look at how do you reduce that cost,” Westpac chief executive Catherine McGrath said.
Earlier this month, the Government announced a range of measures to free up land for development.
But Hickey isn’t expecting prices to drop any time soon.
“If anything, it’s going to get worse because we’ve seen in the last six to 12 months that the house building has slowed down dramatically at the same time as our population continues to grow overall.”
The report estimates that more than 150,000 Kiwi households currently renting could be eligible for shared equity and leasehold home ownership pathways, where a third party assists with the purchase.
But McGrath acknowledged there are still barriers when it comes to scaling these schemes up.
“We’re used to lending over more traditional housing models, so there’s more that the banks can do.”
Hickey added: “Banks themselves find it very difficult to lend to multiple people with a title that is not absolutely clearly connecting a piece of land to an income earner.”
