PHOTO: FILE
Homeownership in New Zealand has reached its lowest rate in nearly 80 years and is expected to decline further, according to new data.
A report by Deloitte, commissioned by Westpac, reveals that ownership rates have fallen below 60% — the lowest since 1945.
The homeownership rate has decreased by over 15% since the 1990s and is projected to drop another 10% by 2048.
“We’re at a point where your family has to be wealthy to enter the housing market, or you have to marry into wealth,” said economics commentator Bernard Hickey.
The report highlights that nearly half of all renters spend more than 30% of their disposable income on rent, making it difficult to save for a deposit.
“The cost of homes relative to income makes it challenging, and we need to explore ways to reduce that cost,” said Westpac chief executive Catherine McGrath.
Earlier this month, the government announced measures to free up land for development.
However, Hickey doesn’t expect prices to drop soon.
“If anything, it’s going to get worse because we’ve seen a dramatic slowdown in house building over the past six to 12 months, while our population continues to grow.”
The report estimates that over 150,000 Kiwi households currently renting could be eligible for shared equity and leasehold home ownership pathways, where a third party assists with the purchase.
But McGrath acknowledged there are barriers to scaling these schemes up.
“We’re used to lending for more traditional housing models, so there’s more that banks can do.”
Hickey added, “Banks find it difficult to lend to multiple people when the title is not clearly connected to an income earner.”