Kiwi home ownership flickers to a 45-year low

By JEREMY REES

New Zealand's culture of home buying is slipping, with the percentage of New Zealanders owning their own homes at a 45-year low.

Pushed by changes to society and the labour market, the rate of people renting has gone up while home ownership has declined, according to a survey by Massey University.

Now just two-thirds of New Zealanders own their homes, part of a steady 15-year decline from 73.7 per cent in 1986. Five years ago 70.5 per cent owned homes.

The rate is now the lowest since 1956, when home ownership was on its way up, pushed by cheaper finance and the long postwar economic boom.

The director of Massey University's real estate analysis unit, Professor Bob Hargreaves said more people were choosing to rent because there was less job security.

As companies cut staff, put more people on short-term contracts or moved employees around the country or overseas, renting became a more attractive option.

"It allows people to more readily move location and take advantage of new job opportunities."

The number of rental tenancies had increased from 90,000 in 1993 to 101,000 in 1996 and 136,000 last year, although the figures could be muddied if people are moving flats more often and therefore inflating figures.

Professor Hargreaves said renting was also becoming more popular as people delayed marriage and settled down to have families later.

Marriage figures show men are on average 28.9 and women 27 when they get married - six years older than in the early 1970s.

Having a family has also been delayed. The average age for a woman's first childbirth is 29.4, against 25.5 in the mid-70s.

Said Professor Hargreaves: "New Zealand is also following overseas trends, with more young, single-person households, solo-parent families and older people living longer by themselves after a spouse dies."

When it comes to moving jobs more often, renting could be a better bet because of the high costs of owning a house. Lawyers' fees for conveyancing and the deposit for a house are substantially more than a bond of four weeks' rent. Saving for a deposit could be difficult when young people already had financial commitments such as student loans.

But what also appears to be changing is New Zealanders' passionate commitment to buying a piece of real estate to call home.

"Many of our forefathers came from the United Kingdom with the goal of owning a house and land. Home ownership has been in our blood.

"In my generation you wanted to buy a house as soon as possible," said Professor Hargreaves, who is 57.

"People are still buying houses but it seems younger people are really weighing up the financial options before they do."

Meanwhile, a survey of the rural market by Massey University's real estate analysis unit found a positive outlook for farm sales as a result of rising produce prices and a low New Zealand dollar.

The unit sent out confidential questionnaires to rural bankers, valuers and real estate agents.

They forecast good sales of dairy farms, hill-country sheep farms, beef and arable-fattening farms compared with the same time last year. But some panellists reported a shortage of properties for sale.

They also expected the farms to increase in price.

The panellists expected the rural market to remain strong for now, although there was some concern that a slowing world economy could hurt demand for exports, in turn hitting the demand for farms.