29.02.08 :: Terrence Aschoff, Manager CHRANZ

The Centre for Housing Research, Aotearoa New Zealand (CHRANZ) has released today research that examines the decline in home ownership rates across age groups by household type, income, and access to dwelling type and location. The research was commissioned by CHRANZ.

The research author Professor Philip Morrison says "A smaller proportion of those under 40 years old are buying their own homes and they are taking longer to do so and it is costing them relatively more. The implications are considerable: delays in starting the 'housing career', starting with smaller dwellings, often further from the workplace, and with lower disposable income for other expenditures. As a nation we know far less about the possible social and economic consequences of both denied and delayed entry to the home ownership market by the present generation than we should."

Key Findings:

Rates of home ownership have fallen from a high of 73.7 percent in 1986 to 66.9 percent in 2006, a rate last prevailing in the 1950s.

This decline has resulted in a marked redistribution of housing equity across age groups, income groups and household type to the relative disadvantage of the young, single parents and low income households.

The relationship between tenure, housing type and location is changing, implying more demand is being placed on housing as an asset rather than a lifestyle support. Some buyers are prepared to substitute accessibility and amenities for assets even where this involves higher commute costs.

More households are compensating for the rising cost of ownership by purchasing multi-unit properties, traditionally the preserve of renters, and by purchasing ‘out-of-town’ further from major employment, especially in the 2001-2006 period. It appears many have traded off the cost of commuting against the cost of ownership to secure an asset. This may have longer term social, economic, ecological and sustainability implications.

More longitudinal data is needed to understand the contemporary housing career and the new contexts in which tenure decisions are made.

The analysis of census data suggests that the decline in home ownership rates are a result of structural shifts in the housing market, and not just a deferral of home ownership by the young. While there is evidence of some “catch-up” in home ownership purchase after initial deferral each successive age cohort does not “catch-up” in full with the home ownership rates of previous generations.

Policy implications of falling home ownership rates and associated underlying changes include: the consequential wealth redistribution from young to old, the rising relative demand for rental housing, and the geographical and environmental implications of different housing choices.

A full copy of the research report is available online. A copy of the CHRANZ Research Bulletin is available online.

For further information please contact:

Professor Philip S. Morrison
Scott Phillips Ltd
Phone: 04 386 1948
Cell: 027 28 28 811

or

Terrence Aschoff
CHRANZ
terrence.aschoff@chranz.co.nz
Phone: 04 439 3326