Editorial: Drop in home ownership no great calamity

Rental accommodation would become more attractive in New Zealand if more high-quality housing were available. Photo / Sarah Ivey

It can be easy to jump to assumptions about statistics, especially if they appear to support a particular agenda. So it was unsurprising that the Green Party should see all sorts of calamitous implications in Statistics New Zealand's latest figures for home ownership.

Taken from last year's Census, these showed that 49.8 per cent of people aged 15 and over own or partly own the home they live in, compared with 53.2 per cent in 2006. This, said the Greens, showed families were being locked out of the housing market and that the Government had failed to make owning a home affordable.

Among the statistics, there are pointers to the difficulties facing some people who are keen to get into a housing market that features high prices and a curb on low-deposit mortgage lending. In the 30 to 39 age group, 43 per cent of people now own or partly own their home, down from 54.6 per cent in 2001. Traditionally, that would be the age when many New Zealanders would expect to be in their first home. It's drawing a long bow, however, to suggest this is all down to housing affordability and symptomatic of a sudden collapse. Or, indeed, that it is necessarily a catastrophic development.

Home ownership has been declining since the early 1990s. And if affordability has become an issue over the past few years, it must take its place along with changing social trends, not least in patterns of spending. In recent years, many young people have accumulated a considerable sum in student loan debt, which takes a considerable time to repay. This has delayed their entry into the housing market.

That is not necessarily a bad thing. Rather than buying a home, they have invested in their productive potential. The downside for them is that when they finally buy a home, they will carry a substantial mortgage debt well past the age their parents had repaid theirs. Nonetheless, their decision represents a big plus for the country and its economy, as is money that people choose to save or invest in other productive ways rather than use, as was once customary, to buy a home.

The Greens' criticism also implies that renting is somehow inferior to owning a home. That will come as a surprise to Germans. Only 43 per cent of them own their own homes. Clearly, this has nothing to do with the economic wellbeing of Germany or its people. Essentially, they like living this way because good-quality rental accommodation is plentiful. Banks also have fairly stringent lending policies, and the country's tax system is not especially favourable to property owners.

Rental accommodation would, similarly, become more attractive in New Zealand if more high-quality housing were available. In that context, the introduction of a warrant-of-fitness scheme on rental properties, as suggested by a Children's Commissioner's expert advisory group, is relevant. It would ensure houses were insulated and dry, safe and secure, and contained essential amenities such as bathroom and kitchen facilities. So far, its introduction has been restricted to state houses.

All that is not to deny that home ownership is desirable. It gives people a stake in society that extends beyond the economic. Understandably, Finance Minister Bill English, therefore, chose to challenge the Census data. He could also have pointed out that it is simplistic to attribute any drop in home ownership to a failure of Government policy. If, as the Greens contend, the family home has become an unaffordable dream for many, it is a dream that an increasing number of people are quite prepared to postpone or abandon.