First homeowner in three generations
In March 2018, home ownership was at its lowest in almost 70 years. Stuff’s Off The Ladder series talks to those priced out of the market. Geraden Cann reports.
Holly Tipene’s mother and grandmother spent their entire lives in rentals. Until recently, she had resigned herself to also never owning a home and having nothing to pass on to her three children.
Tipene works as a housekeeper at awaikato University hall of residence and husband Kere Tipene is a delivery driver but despite both working fulltime and having enough to pay rent, the ability to build a deposit and secure amortgage was always beyond reach. In this respect, the family is part of a growing cohort of working families unlikely to ever own a home.
Government research estimates 169,000 Ma¯ori and Pacific households and families with children are in the same situation.
‘‘I could never progress to the next level, which meant my family were forever staying in the same generational rut,’’ Tipene said.
‘‘The mind frame sort of sticks. You think: That is an unachievable goal for me too.’’
She is Waikato-tainui and Nga¯ti Kahu, and Kere is Nga¯ti Awa and Nga¯ti Kahungunu, making them part of another group hit hard by the housing crisis.
In 2019, a report was published by Building Better Homes, Towns and Cities titled Homeless and landless in two generations – Averting the Ma¯ori housing disaster. It found that in 1936,
71 per cent of Ma¯ori lived in dwellings the wha¯nau owned.
By 1991, the ownership rate had fallen to 56 per cent, by 2013 it was at 43 per cent, and by May 2019 it was likely below 40 per cent.
The report reads: ‘‘If home ownership continues to decline at the rate it has been falling since 1991, Ma¯ori will almost be entirely renters by 2061. This would be a social and economic disaster.’’
University of Canterbury senior researcher John Reid co-authored the report and said the government intervened in the housing market to the benefit of Ma¯ori from the late 1950s to the 1980s but ownership rates fell sharply when the government stepped out of the market in 1991.
Between the 2013 and 2018 Censuses the proportion of Ma¯ori living in owner occupied homes did increase from 43 per cent to 47 per cent, although some factors have contributed to questions over the reliability of the 2018 results.
It was this ability to leave something behind for future generations that Tipene said was really important. ‘‘I sawmymum in that struggle, because when they passed on they did not have anything to leave us like stability – and all you want in life as a parent is to create stability.’’
For the family at least, it looks like the cycle of perpetual renting has been broken. They have been selected for housing charity Habitat For Humanity’s Progressive Home Ownership (PHO) programme, and now for the first time they have a path to owning a home. The family will rent the home for the first five years, after which the charity will facilitate the family’s transition into
ownership of the property when they are mortgage ready.
In the decade after that, the family will transition into the ownership in occupation phase, signing a sale and purchase agreement to buy the home on a deferred settlement basis.
When they are ready, they will secure a bank loan and become independent homeowners.
In mid-2020, the Government announced the $400 million Progressive Home Ownership
Fund to target this cohort. It is hoped to help between 1500 and 4000 families into homes.
ATE Tu¯a¯papa Kura Ka¯inga (Ministry of Housing and Urban Development) spokesperson said the fund had a specific aim to address affordability issues for Ma¯ori, Pacific peoples, and families with children. The median household income of the families selected for these homes is about $62,000.
Habitat’s programme is funded in part by an $8.25m zero-interest loan from the Government’s $400m fund as part of the initiative to build 33 homes.
Stuff’s Housing Affordability Dashboardmonitors howmuch households require for a deposit on their first home and how long the average household will have to save before having enough for a deposit.
In February, the length of time it took to build a deposit decreased by 16 weeks to 225 weeks, and the average fortnightly mortgage repayment decreased $78 to $869.
However, the time taken to save that deposit is still 28 weeks longer than it was a year ago, even as historically low interest rates have kept mortgage repayments steady.
Tipene said she now sits in bed at night and is comforted to know her children will always have a home to come back to.
‘‘This opportunity I never thought would happen in a million years,’’ she said.