KEY POINTS:
Plummeting home ownership rates could be socially disastrous, according to the hard-hitting report on housing trends released this week.
The Centre for Housing Research report released on Monday pointed to the potential fallout for society as well as individuals.
"Decline in home ownership affects Government policy areas such as health, stable communities and education," said the report.
Aucklanders could get much poorer as a group if the pattern continues. Young families and the elderly will be the worst affected groups if they remain barred from being able to buy a house.
Poorer people condemned to rent will need more Government benefits.
"Delayed home ownership will have implications for the level of debt households will carry through to later stages of their life cycle," said the rental report from a team led by Ian Mitchell of consultants DTZ in Wellington.
Repaying a huge mortgage at rising interest rates later in life is almost impossible and could create financial, health, family and social problems. Home ownership levels will drop from 64 per cent in Auckland in 2001 to 58 per cent by 2016, the report said.
This will effect the labour market, schools, hospitals and other social services because a rental population is more transient. The report said housing worth $50 billion would be needed to keep up with rental demand in the next decade.
Declining affordability affects the poor and some ethnic groups more than others. Pakeha are more able to buy than Maori or Pacific people, perhaps due to having families later so they can buy a house first.
The housing stress could make Auckland more unpopular and employers could find it harder to get staff. Older, predominantly home-owning, people could leave the region with younger, predominantly renting, people moving in.
Young New Zealanders who saw Auckland as a first step into Australia or Britain could increasingly bypass the city and head directly overseas.
The build-up of equity in a house - traditionally New Zealander's main form of saving - would be permanently abandoned. That would expose the city to widespread financial insecurity. Those unable to extend a mortgage in harder times would be in a less stable position.
Without any hope of a home, young people could change their priorities and have a greater focus on consumption.
More transient lifestyles, increased mobility and a desire to rent in trendy areas rather than buying could become the norm.
A more mobile population could destabilise communities and cause even higher turnover among renters. Angela Maynard of the Tenants Protection Association says people would not be so concerned about a rising rental population if renter rights were strengthened and accommodation standards in the city raised. She wants greater length, and security, of tenure; landlords to have to give reasons for eviction; and a warrant of fitness inspection for flats and houses.
The report said particular lifestyle preferences could become the norm. Ponsonby was cited as fitting the new "vision" of Auckland, mainly for its cafe/entertainment culture.
"More and more people are choosing where and how they live based on their lifestyle preference."
