A recent Productivity Commission report highlighted regulatory restrictions that helped to drive up house prices nationally from around 2 times average after-tax household incomes in the 1980s to around five times today.
Demographics are also behind rising tenancies. More women now continue their careers after having children, and so put off having children - and buying houses - until they are older. The median age of mothers rose from 27 in 1986 to 30 last year.
But another factor driving up house prices is widening inequality. The Social Development Ministry says after-tax incomes increased in real terms from 1986 to 2010 by 40 per cent for the richest tenth of households, but by 17 per cent for the poorest tenth.
Income tax rates have been halved since 1986, but GST, introduced in 1986 and raised to 15 per cent in 2010, has raised living costs much more for those on low incomes. And predictably, home ownership rates have dropped much more in the low income groups.
Victoria University geographer Philip Morrison says the average chances of a household in the top quarter of income earners owning their own home by age 50 slipped only slightly, from about 96 per cent in 1991 to 92 per cent in 2006, while the chances in the bottom quarter fell sharply from about 74 per cent to 60 per cent.
A shift in state housing policy further widened the divide. The right to capitalise the family benefit to buy a first home ended in 1986. State lending for home ownership stopped in the 90s.
Another change in 1992 allowed investors who owned rental properties through qualifying companies to offset losses on the properties, where the rent fell short of mortgage payments, against the owners' other income. But they could still take the profits of capital gains tax-free when they sold.
Officials estimated in 2008 that the ability to deduct losses meant an investor would be willing to pay $25,000 more for a median-priced house than someone who planned to live there.
The Smiths borrowed the full cost of buying their two rental properties five years ago. "We have benefited from generous tax schemes," says Anita.
Says Nigel: "We win either way. Either you are getting the tax break, or you're winning because you're getting enough rent to cover the mortgage."
At the time it seemed the sensible thing to do. Today Anita is not so sure. "I do think it's morally wrong."
The Smiths used a state subsidy to insulate one of their houses, in Point England, and after seeing Bryan Bruce's documentary on child poverty on TV3 last November they bought a heat pump for that house, too.
But they have accepted an agent's advice to go to the Tenancy Tribunal about a tenant in their other house, in Manurewa, who has not been able to pay rent because of a bad accident.
"I think the Government should provide state houses, rather than just private landlords," says Anita.
"Then people like our tenant who have had an accident won't be at risk of being evicted."
