And the breakdown suggests this is becoming more normal for younger generations.
A Kiwibank-commissioned survey of 2008 nationally representative respondents found 34% of homeowners said they received financial help from family to buy their first home.
But for younger generations, the numbers were much higher, with 65% of Gen Z and 43% of millennials tapping into parental support to get on to the property ladder.
I suppose we should account for the fact that Generation Z’s are still largely in their early 20s so you wouldn’t expect many to be on the property ladder without some sort of parental help.
But clearly, there is a trend emerging. The median age for Millennials is mid-30s so for nearly half to still be relying on help from their parents to get a home suggests something is wrong.
The survey found that 76% think that at the current rate, future generations will be shut out of home ownership unless their parents can help them financially.
Kiwibank’s home lending general manager Nicole Pervan said she doesn’t think that’s sustainable suggesting it is unrealistic for parental support to become the only pathway for Kiwis to own their home.
I’d like to think that’s true. But I don’t see any sign of this trend reversing. Unfortunately, there are plenty of countries in the world with deeply entrenched social divides where intergenerational wealth transfer is the hope.
They are often countries we might describe as Third-World or developing. What makes the poverty in these countries so crippling is the lack of economic opportunities to escape it.
Despite the hyperbole that’s been thrown around during this post-Covid recession, New Zealand is not one of these countries ... yet. But I think it would be dangerous to assume we couldn’t become one.
What concerns me is that the past two years have seen house prices fall, affordability measures have improved marginally and the number of first-home buyers as a percentage of overall buyers, is up.
But this might be as good as it gets for young house hunters. Economists expect house price growth to rebound next year, back to between 6%-8% depending on whose forecast you read.
And as the prospects of young people saving a deposit and servicing a giant mortgage dwindle it is only natural for their parents to start thinking about what they’ll need to do to help them.
They’ll need to ensure they have enough wealth beyond their own retirement needs. What’s the most obvious way to do that in this economy? Buy a rental property.
And so the trend continues.
A few weeks ago I wrote about another grim statistic: the record number of Kiwis leaving the country. About 80,000 New Zealanders left the country long-term in the year to November for a record net migration loss of 54,700 citizens.
We don’t know for sure but it is a good bet that most of them were young.
It’s not rocket science to conclude that if you don’t have access to the “bank of mum and dad” but you still have ambitions for a comfortable financially secure life, then you might opt to try your luck in Australia or further afield.
Some of these leavers will hopefully return with deposits saved, but many won’t.
I wrote in that “brain drain” column that turning around this statistic would prove the real test of this Government’s success.
But I hope that Kiwibank keeps tracking the “bank of mum and dad” numbers as an important measure of our progress - or slide.
The goal of Government has to be to create a society and economy that presents opportunity and offers hope for young people regardless of how well off their parents are.
We traditionally measure economic progress by tracking inflation, unemployment and GDP growth. We will be likely to see those numbers fall into line next year and the economy will theoretically be much better.
That will be something to celebrate after two tough recessionary years.
But what does it tell us if all the topline economic statistics are doing what they should and people are still leaving? Or if people in their 30s still can’t afford to buy their first home without help from their parents.
It tells us the real work is just beginning. We need to grasp the opportunity that a period of relative economic calm offers to make some changes.
A more achievable pathway to home ownership has to be part of that equation.
If it’s not about crashing house prices then it needs to be about boosting real wages - not inflating them - but putting conditions in place for productivity growth.
Exactly what to do is not so easy to resolve.
Is it a Capital Gains Tax or Wealth Tax as proposed by many on the left. Or is it lower taxes and less regulation as proposed by those on the right?
In reality, a large chunk of the voting public, safe in their home-owning, economic circumstances remains comfortable with incremental change.
That makes it a lot easier for commentators (on both sides of the political divide) to demand radical change than it is for those in power to actually deliver it.
But surely nobody wants to see this country slide into a place where the social divide is entrenched across generations.
So we need to find some solutions that change our course but are workable across a divided political landscape.
The challenge for all the major political parties is to find a way to address inequality without undermining New Zealand’s ability to generate new wealth.
That’s going to take some thinking and some talking. And it’s going to take some strong leadership.
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
