Is it time to give up on the pursuit of affordable housing for New Zealanders? File photo / Bevan Conley
Is it time to give up on the pursuit of affordable housing for New Zealanders? File photo / Bevan Conley
COMMENT
An editorial published last week (NZ Herald, January 10) cited global monetary policies and the forces keeping interest rates low as key obstacles for our Government to overcome this year to find new ways to provide affordable first homes.
The argument being that in a low interestrate environment, housing remains an attractive investment option for those with the base equity to take advantage of it. The article also claims this may not be as big a problem in the United Kingdom or Europe, where homeownership has not always been a widespread aspiration.
I agree that the interest rate drop has exacerbated the situation. However, our current housing crisis has been caused quite simply by the fact that we don't have enough houses.
This has been the case in Auckland for more than 15 years, and it is not a uniquely local phenomenon. If we look at how other countries have tackled the problem, we know the solution is not as simple as supporting people into immediate home ownership – the UK is in the exact same boat.
Contemporary expectations don't necessarily gel with traditional home-owning aspirations, and it's not realistic that everyone is going to be able to own their own house today.
According to a study by UK mortgage lender Santander last year, while 90 per cent of British would-be first-time home buyers still aspire to own their own home, 70 per cent believe the dream of homeownership is beyond them. Santander itself forecasts that only a quarter of people aged between 25 and 34 will own their own home – down from over a half just 20 years ago.
Politics often plays with aspiration and not reality but I think it's time that we grasp the reality of the housing crisis whilst nodding to our aspirations of homeownership.
In assessing how to manage our housing shortage, we should consider how much Auckland has changed in the past 20 years. It remains a fantastic place to live with an increasingly diverse and cosmopolitan society. However, it is because of this diversity that we can't simply assume that there is a one-size-fits-all solution in terms of housing.
Our focus this year therefore shouldn't just be on creating a pathway to affordable ownership, but on how to diversify the market offering and create passage to warm, safe and healthy homes regardless of whether these are owned, rented or shared.
Currently in New Zealand's rental sector, the prominent mum and dad investor culture means that quality new homes are seldom built for the rental market. Mum and dad are far more likely to build a new property for themselves to live in and then rent their old one (or old ones), rightly managing their portfolio to suit their own circumstance.
This traditional dynamic puts a limitation on rental supply in terms of diversity, quality and secure tenancies. It also propagates the myth that a house needs to be owned to be considered a home.
The core tenets of a home – safety, security and sanctuary – should not be defined by whether or not you own it. Our housing market needs to evolve beyond this binary outlook, by adopting contemporary trends and sectors such as co-living and build to rent.
Build to rent is a specific form of residential property and investment class, whereby the assets, or homes, are owned by a large-scale investor pool rather than an individual landlord. This allows a clear focus on customer service, through quality of build, amenity and maintenance.
Flipping the "landlord and tenant" scenario to a much more collaborative "provider and customer" relationship can offer security of tenure and longer terms to give renters more flexibility and certainty on how much it's going to cost.
Paul Winstanley. Photo / supplied
Our relationship with property changes over our lifetimes. We aren't just homeowners, renters or sharers - we will likely be all of these things at some part of our lives.
Therefore, we need to make sure that government policy is not just focused on providing homes, but that there is also a priority to have affordable housing, shared ownership, and build to rent in a vibrant private rental sector because we need all of them working in combination.
Politics often plays with aspiration and not reality but, because housing is so crucial, I think it's time that we grasp the reality of the housing crisis whilst nodding to our aspirations of homeownership.
• Paul Winstanley is head of research and consultancy at JLL New Zealand, which specialises in real estate and investment management.
