Sandra Paterson: Lucky to have security of my own piece of dirt

COMMENT

I bought my house in Mt Maunganui for $119,000 four years ago. The real estate sign out the front declared, "paint, patch and prosper!" but when my father saw the rundown old bach he suggested dryly that "buy it and bowl it" would be a better idea.

There were holes in the walls, rats under the floorboards and fleas in the carpet. Cockroaches scuttled away every time I opened a cupboard; the ceiling was yellow with grease and nicotine.

The previous owner lived in a rest-home and never checked on the house, so the tenants had trashed it, ripping holes in the wallpaper and stashing blackened drug paraphernalia behind the pelmets and in other hidey-holes they later forgot about.

Despite my father's misgivings, I set about making it habitable, spending every evening cleaning, sanding, painting and hammering.

Like most renovators, if I had known how long it would take and how hard it would be, I probably wouldn't have done it, but five months later every surface was clean and shiny and we moved in.

It is still just a dilapidated old bach but it's home and I am attached to it. The walls are painted in bright Pacific colours and on a still day with big surf you can hear the sound of the waves from the backyard. Thanks to the real estate boom the commercial value of it has now more than doubled, but that is not the point.

Worth far more to me is the security and sense of achievement I get from owning my own home, which is why I pricked up my ears at a report released last week by the New Zealand Institute, a business think-tank, entitled, "It's Not About the Money".

According to the report, asset ownership or the lack of it has a profound effect on individuals and communities, not just economically but psychologically and socially.

Buying a house or business, or owning financial assets, gives people a sense of control and independence and makes them more likely to be involved in the community.

It has also been linked to better health and employment prospects, better quality of life, stability in relationships and better education for children.

You would think, then, that helping people put a stake in the ground would be a priority for Government policy-makers.

But no. Gone are the 3 per cent housing loans and the Government rent-to-buy schemes, gone is the opportunity to get family assistance in a lump sum. Even the primary school banking programmes have disappeared, in which children were encouraged to open an account and deposit a couple of coins every week.

All other Anglo countries, and most OECD nations, deliberately encourage asset ownership. We now have the most hands-off approach to helping people to accumulate wealth - and it is not working.

For people on low incomes, and with student loans and declining home affordability, acquiring assets is becoming increasingly difficult. The bottom half of the population owns less than 3 per cent of the total wealth; and 16 per cent of households have negative wealth - their liabilities exceed their assets.

Home ownership among under-34-year-olds has fallen 15 per cent in a decade and I hear a sense of hopelessness among many of my friends, wondering if they will ever get ahead. Many could service a mortgage, but coming up with the deposit seems all but impossible. I was able to only because a generous friend lent me some money.

Three years ago, a programme called the American Dream Demonstration began in 13 US cities. More than 2000 accounts were opened for low-income earners who had never saved before.

Whatever they put into the account was matched dollar for dollar by various philanthropic organisations, and the money could be withdrawn only for buying or repairing a home, starting a business or tertiary education.

The average amount saved was US$700 a year, including the matched portion. Not much. But 93 per cent of them felt more confident about the future; 60 per cent said they were more likely to stay employed or to look for work; and more than 70 per cent felt for the first time they would be able to buy a home.

What about the New Zealand Dream? The research clearly shows it is good for society when more people feel they have the chance to become financially secure and to build a future.

Matched savings programmes such as those in the United States and Britain may be the answer; or maybe first-home grants, as in Australia, where first-home buyers are given $7000 tax-free. There are many ways to do it but Government must first recognise the benefits of widespread asset ownership.

Of course, there is downside to owning a home or business: it takes work. Looking outside now, I can see I seriously need to get a line-cutter. Paint is peeling off the window sills and the walls of the house are turning a mossy green and need water-blasting.

But it is my home on my piece of dirt, which gives me a contented kind of feeling. And, according to the research, that's not only good for me but good for the community.