Home­buy­ers’ price rise night­mare

Central Leader - - YOUR PAPER, YOUR PLACE - ROB STOCK

house is not $3000, but just over $6000.

Writ­ing money col­umns for ur­ban first home­buy­ers, many in their 30s, is tough these days.

I try to keep a sunny tone in col­umns, fo­cus­ing on the power of hard work, thrift and care.

But when it comes to buy­ing a house – a nor­mal oc­cu­pa­tion for pre­vi­ous gen­er­a­tions – scrimp­ing, sav­ing, and liv­ing a life of pinched fru­gal­ity aren’t enough.

Hop­ing for a hous­ing crash is point­less. Even if house prices did sud­denly be­come af­ford­able, banks would be in such a state they wouldn’t be lend­ing to first­time buy­ers.

But it’s my job to of­fer strate­gies to as­pir­ing home­buy­ers, so here goes:

Have wealthy par­ents. In­herit money, win Lotto, or marry some­one rich.

Earn an out­ra­geous amount from an early age, save madly, then get an enor­mous mort­gage, hope the mar­ket holds up, and you have no breaks in in­come.

Make yours a re­ally big in­come. Re­mem­ber, many home­own­ers are now out-earned each year by their homes. We couldn’t af­ford to buy our houses any more than the young can save an ex­tra $1000, $2000 or $3000 a week so their de­posits keep up with price in­fla­tion.

Don’t have chil­dren. They ruin your bor­row­ing power, and earn­ing ca­pac­ity.

Adopt a shared-space ap­proach to own­er­ship. Buy with friends. Stay at home for­ever in multi-gen­er­a­tion house­holds where the grand­par­ents are on site to pro­vide free child­care .

Buy a house in some­one else’s town, and rent it out. You can re­tire there one day.

Form a sin­gle-is­sue ‘‘fair priced hous­ing’’ po­lit­i­cal party. Get elected. Form a coali­tion gov­ern­ment. Take away ur­ban plan­ning con­trol from coun­cils. So­cialise the costs of build­ing new homes. Ban for­eign own­er­ship. Start a vast so­cial hous­ing pro­gramme.

Hood­wink the bank into be­liev­ing your in­come is high, then take in lodgers to help pay the in­ter­est bill.

Be a wealthy for­eigner. We won’t ask where your money came from.

Strat­egy num­ber one has been work­ing well, though scut­tle­butt is that num­ber eight and nine are win­ners for some too.

Cyn­i­cism aside, what should young peo­ple do?

Ag­i­tate for change. Fo­cus on ca­reer. Be fru­gal. Save. Take help where its avail­able (par­ents, Ki­wiSaver, etc). Be in­ge­nious. Be lucky. Look for op­por­tu­ni­ties, even in other towns, cities, and coun­tries.

And par­ents? If noth­ing changes, money and prop­erty will be­come in­ter­gen­er­a­tional wealth.

Help fam­ily young­sters fo­cus on ca­reer, live at home longer, avoid stu­dent debt, and build wealth, while all along not dam­ag­ing your own re­tire­ment prospects.

PHOTO: SZEFAI/123RF

Multi-gen­er­a­tion house­holds where the grand­par­ents are on site to pro­vide free child­care is the norm in some cul­tures.

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