The Reality of Home-Owning in Aotearoa

Photography by Amelia Radley

Aotearoa, once a country that offered plenty opportunities for homeowning, is now seeing many young people uncertain about their future in the housing market.

As our housing prices soar, it is increasingly only those with wealthy parents who have been able to buy into the property ladder.

For students, most of whom are existing off measly costs from StudyLink, the impending doom of home-ownership seems completely out of reach.

The Bank of Mum and Dad

New research has shown that the ‘Bank of Mum and Dad’ now ranks amongst the top financiers in Aotearoa (McClure, 2022). Parents across the country have forked out a total of $22.6 billion in financial assistance for their adult children. This has put New Zealand’s parents next to the country’s major banks as the biggest providers of housing finance in the country.

For those in Auckland, parents were much more likely to assist their adult children, with 58 per cent of parents lending a hand. Auckland parents also lent close to $20,000 more than the national average (McClure, 2022).

These figures illustrate the troubling reality of the New Zealand housing market, where young New Zealanders are unable to get onto the property ladder without financial support from family members.

For those without parents with the financial means to support their purchase, they are mostly left in the dust. This is of deep concern in a country that prides itself on the false narrative of having a soft class system as it is becoming increasingly obvious that the wealth in this country is held amongst a select few.

This leaves those who do not benefit from intergenerational wealth and privilege without long-term housing opportunities or financial security.

“We’ve reached a point in New Zealand where it’s no longer enough to do all ‘the right things’ to buy your first home – to get a job with a good income, save furiously and cut back on the ‘nice to haves’,” commented Gemma Rasmussen, Head of Campaigns and Communications at Consumer NZ, in a recent interview.

“The role of the Bank of Mum and Dad is more pivotal in the first homebuying process,” continues Rasmussen, “but it also means that we’re seeing a greater social divide of who gets to buy a first home and who does not.”

“For more affordable pricing, house prices have to fall, and [politicians] have to be willing to let that happen and to help on regulation, and the supply side of development too.”

Are New Zealanders Obsessed With Home-Owning?

What is likely caused by a historical hangover from past opportunities, is the deep inclination of New Zealanders to become homeowners at such early stages in their lives.

As a country, the idea of homeownership has been drilled into our psyche as a symbol of power and success. ‘The quarter acre dream’ serves as an ideal that all New Zealanders hope to reach on their journey up the ladder.

But this is not necessarily the case in other countries. In a range of Scandinavian countries and states in Southern Germany, local councils own large swathes of land and often hold larger stocks of social housing (Cann, 2021).

Also in Germany, there are large rental areas that were established during the 1960s-80s which specifically catered to workers. Some of these still remain today and help to alleviate housing pressures for the working class (Cann, 2021).

Therefore, in countries with better social housing and renting options, where the rights of tenants are better protected, you see individuals opting to continue leasing properties rather than buying their own.

Students, more than most, know how shocking the state of renters' rights are here in New Zealand. With so many individuals experiencing horror stories at the hands of private landlords, it is not surprising that many see the way out through purchasing their own property.

If New Zealand simply invested in better social housing and renters' rights maybe we would see less demand to buy into the housing market.

As the property ladder gets further out of reach for those outside of the ‘one per cent’, we need to get more serious about our social housing and the support offered to renters in this country.

We need to strive towards better outcomes that enable all New Zealanders access to affordable, safe and healthy homes.

The housing crisis is not going to be solved by building and purchasing more private properties.

We need to look towards different solutions that offer better outcomes for all New Zealanders. This needs to be done by looking towards long-term options that aren’t solely focused on a future of homeownership that is unobtainable for so many.

Housing is a human right and it is a necessity that we distribute housing options evenly to all New Zealanders.