Home Ownership. A dream or reality?
According to Stats NZ, home ownership is the lowest it has been in almost 70 years, however the property dream is still very much alive amongst Kiwis despite several barriers to home ownership in New Zealand. 18-39 year olds (also dubbed as ‘Generation Rent’) makes up 1.5 million adult New Zealanders and of that group, approximately 40% own a home, leaving the remaining 60% (916,000), who don’t own a home.
83% of Generation Rent still think home ownership is a ticket to long-term financial security and 55% are actively working towards the goal of buying a property to live in the next five years.
With lower average savings and greater average debt than older age groups, Generation Rent are struggling to get on to the housing ladder. They are making sacrifices to do so; by cutting back on lifestyle expenses, working overtime, living with family and delaying starting or growing a family in order to save for their first home. Close to 40% of respondents with KiwiSaver have either used or are planning to use KiwiSaver savings towards the purchase of their first home.
The majority of respondents in the FSC research see the New Zealand dream of home ownership as no longer attainable for the average Kiwi and younger generations, as the cost of buying a property is becoming increasingly expensive. Affordability, saving for a deposit and the availability of an affordable property in the desired location are the biggest barriers.
Read the full report from the Financial Services Council (FSC) 2021 research here.
If you are thinking of using your KiwiSaver money to buy your first home here is a guide you may find useful.