Doomsayers are biggest deterrent to youngsters getting on property ladder, but it's possible if they get stuck in.

A recent report showed that Generation Y - those under 28 - were increasingly becoming property orphans and spending their money on travel and shopping rather than saving for a house deposit.

If this is true then all the commentators who have bombarded us with how housing is grossly unaffordable and out of the reach of young people need to shoulder the blame.

One commentator tried to back up his claim by saying that a person on $55,000 who wanted a $500,000 home would take more than 10 years to save the deposit.

It is no wonder Generation Y don't believe there is any point in trying. Who can blame them for giving up their hopes for home ownership and indulging in retail and travel therapy?


These commentators may think they are sticking up for the young, but they are not doing them any favours at all. Young people need to be told some home truths (pun intended) but they also need to hear that home ownership is possible and that there are strategies for how they can achieve it.

First, the home truths. No one has a right to home ownership. It is just as hard to get into your first home today as it has always been. You are not going to get your dream home first up. If you want to own your home you have to make it a priority and prioritise your spending to save a deposit. It will probably be more expensive to own your home than to rent but you will be better off in the long run.

A West Auckland couple were recently in the media saying they couldn't afford a home. They had one child but were living in a three-bedroom house and paying rent in the top 25 per cent price band. Renting a two-bedroom moderately priced house alone would save them around $120 a week or $6000 a year. If you choose to spend all your money rather than save some of it, you will not achieve home ownership.

This couple were on a single income of more than $80,000, quite a bit higher than average. Through a cheaper rental and careful budgeting they could save $300 a week. In five years this would amount to around $80,000 in savings. Combined with a KiwiSaver first home grant and withdrawing their employer contribution, their savings would be around $110,000.

Using this as a 20 per cent deposit they could buy their first home up to a value of $550,000. However, they would probably be better off buying a cheaper $450,000 home with a more manageable mortgage. By doing this they could be in a debt-free home in 25 years. In all likelihood they would be able to upgrade their home after a few years and still be in a good financial position.

It is a lot easier to obtain your own home before having a family. If you are young and don't have children it is easier to have flatmates to supplement your income. It is also easier to buy a property with friends and share the cost. This works well with do-up properties because you can share the workload, add value to the property and perhaps sell it after a few years so each has a deposit for their own home.

Without family commitments it is easier to get a second job, which is what I did to get into my first home aged 24.

If none of this appeals a valid choice is to take the cheaper option of renting and have more money to spend. It's all about individual choice and there are plenty of people online saying it is the only way to go.


However, if you are young and want to own your own home, don't be put off by the naysayers. Home ownership is achievable, but it isn't easy and never has been. Mortgage interest rates were 20 per cent in the mid 1980s.

If you want to be a homeowner, work out what you have to do, get stuck in and do it. Seek advice from people who actually want to help and have a positive attitude to your goal.

Andrew King is executive officer of the New Zealand Property Investors Federation.
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