Parents invest in futures
Young property buyers banking on parents’ financial help may be in the very best place, writes
Anuja Nadkarni.
Home ownership is important for Chinese millennials living in New Zealand - but not necessarily the same reasons as in for China.
A recent study on global home ownership showed 19 to 36 yearolds with Chinese heritage led the way with a whopping 70 per cent making it onto the property ladder.
Real estate agent Tony Tang says the high rate of home ownership among these millennials in China is embedded in traditional thinking a house means financial stability.
Tang said owning a home was particularly attractive for marriage as it ensured certainty and security for starting a family.
But owning a home for New Zealand-born Chinese wasn’t based on being a prerequisite for marriage, Tang said.
Public health nurse and home owner LeAnne Chew, 26, is New Zealand-born and ethnic Chinese. She said she started looking for homes two years ago, on her parents advice.
With her parents acting as guarantors, Chew was able to buy a $375,000 studio apartment in the Auckland CBD fringe suburb of Kingsland.
Chew is Malaysian Chinese and said that for her, owning a home wasn’t motivated by marriage, it was more a decision for investment.
‘‘There’s no pressure from my parents to live in a home that we own, they just want to make sure we’ve got financial security or some form of investment for our future,’’ Chew said.
‘‘I was spending all my money on clothes and travel, so they thought if I was tied to a financial commitment then my money would go toward something that would grow in value.’’
She said the negative perceptions and connotations attached to Chinese buyers in New Zealand was concerning.
‘‘The media has portrayed Asians owning houses as greedy, but they work just as hard as anyone else.
‘‘If New Zealand Europeans get help from their parents for buying a house, they’re not perceived the same way. It’s very biased and unfair.’’
Chew’s parents were immigrants to New Zealand from Malaysia in the 1980s and both work ordinary jobs, her dad being a draftsman and her mother in a customer service job.
‘‘They’re not wealthy but they work really hard and they saved a lot of what they did earn. Them coming to New Zealand was a sacrifice on behalf of their family.
‘‘I guess they’re very family driven and it’s like a unit. The parents will look after the children and expect the children to look after them. In terms of culture it’s the main driver.
‘‘In the greater scheme of things this investment property apartment is meant to help me eventually get my own home,’’ she said.
Similarly Patrick Yu (name changed), 25, is also paying off the mortgage for a $700,000 twobedroom apartment in Newmarket that his parents paid the deposit for.
Yu was born in China but moved to New Zealand when he was four. He lives in the apartment but is looking to rent out the spare room to pay off the mortgage.
Yu started looking for a house two years ago after he started a stable job, in order to get onto the property ladder before the prices went any higher and lock into a steady investment.
‘‘It makes more sense to own a home than to rent a house and pay for someone else’s mortgage,’’ Yu said.
The average asking price on Auckland properties increased by more than $130,000 in the last year, according to the Trade Me Property index.
Parents stumping up deposits or standing guarantee is not exclusive to the New Zealand Chinese community.
Real estate agent for Barfoot and Thompson Alex Wu, also said he had noticed more millennials, not just of Chinese background, owning homes with the help of their parents either as guarantors or purchasing it for kids and the mortgage being paid by the children.
‘‘It’s more common to see parents acting as guarantors for their children and them paying the rent for the property,’’ Wu said.
Tang said traditionally in Chinese culture parents looked after the children and later expected to be looked after by their children in return, often living with them in later years.
Parents are still the brightest hope for millennials to get on to the property ladder in the overheated and overpriced New Zealand real estate market.
There's no pressure from my parents to live in a home that we own, they just want to make sure we've got financial security or some form of investment for our future.