The cost nightmare of the dream house

The dream of home ownership is fading for many Kiwis with a new report revealing eight in 10 feel it is now impossible to buy a house.

With a post-Covid price surge compounding the problem, worry is growing, according to The Kiwi Family in 2021 report, commissioned by OneChoice.

Data shows 80 per cent of house hunters feel locked out of the property market and seven in 10 are losing hope they will ever be able to buy their own home.

The growth of the property market was one of the biggest stress factors for New Zealanders, according to the report.

Massey University property and housing expert Graham Squires said affordability was a hot issue.

“We can argue that there has been an increasing income gap between renting and owning, where home ownership is increasingly out of reach for low-income households.

Home ownership was unattainable for the majority of young people without support, he said.

“Adding to the pressure is the social normalising that home ownership will increase social wellbeing.”

Despite high prices, the report found house hunters were still keen to get on the property ladder.

Seven in 10 said the biggest motivator to buy a property was to stop paying rent.

The overwhelming majority (93.8 per cent) of the 503 respondents said rent was too high.

Auckland rents exceeded an average of $600 a week in April, it emerged this week, with data from Barfoot & Thompson showing a new $605/week average rent in June.

Home ownership and rental concerns raised in the Kiwi Family Survey echoed those raised in the Weekend

Herald’s recent Home Truths series. It highlighted how unaffordable housing has become, with the typical home now costs eight times the typical annual household income.

In Auckland, the average home costs nine times the annual salary, according to CoreLogic data.

The Home Truths series found 75 per cent of children moving house at least once before they were 8.

Forty per cent of Kiwi children were moving house on a regular basis, and those renting were more affected.

OneRoof.co.nz editor Owen Vaughan said first-home buyers in Auckland and Wellington were often stretching their budgets so far there was little spare cash.

“Less than 50 Auckland suburbs have median property values under $1 million, and just two, Auckland CBD and Rakino Island, have values less than $600,000,” he said.

“Five years ago, buyers could expect to pick up a home for less than $1 million in more than 50 per cent of Auckland’s suburbs.”

The OneChoice Kiwi Family Survey also found house hunters were not being unrealistic in their hopes for property ownership.

More than three-quarters (83.1 per cent) were not worried if their first home was not their dream home as long as they owned a property.

More than half of the respondents were making sacrifices, including cutting back on their lifestyle expenses.

A third were pooling resources

Adding to the pressure is the social normalising that home ownership will increase social wellbeing.

Graham Squires

with others to buy a home together.

Despite low expectations when looking for their first home, the report revealed first-home buyers wanted the same thing when it came to buying a house.

Good value was the number one consideration for 70.5 per cent, closely followed by living in a safe neighbourhood at 67.5 per cent.

As well as highlighting the struggle to get on to the property ladder, the OneChoice survey also revealed 43.4 per cent were concerned about living pay cheque to pay cheque.

About two-fifths (41.1 per cent) were concerned about the future job market security and stability.

More than half feared wages were not keeping up with the cost of living.

Average family paying $100 more a week.