Listening to the the radio this morning, I heard an interview with Consumer NZ about their new research into the property market. Much of it is quite disturbing, unless of course one is in possession of multiple real estate interests. Even then, the prospect of an ever widening class system defined by property ownership/or not should be of concern.
'three out of five property owners could not afford to buy their home at its current value. Meanwhile, more than 60-percent of renters believe they're locked out of the property market.' (RNZ today)
With average house values now at 12 times annual incomes, ours is one of the least affordable property markets anywhere on the planet, unless of course one can leverage against existing property and simply acquire more. But for those starting off, even on good incomes, high rents paid to investors often prevent saving for even a small house.
The usual clichéd thrift advice by the older generations about having less brunches out, less coffees, less fun etc. are now exposed for the shallow deflections that they always were. Most houses went up in value by the cost of approximately 2,500 Eggs Benedicts + 1 coffee in the last year. So encouraging the younger generations to scrimp and save 'like we did' is of little help or comfort in this market. Media outlets publish miracle stories of those who manage to get 'on the ladder' from scratch. The 'freak show' of exceptions and outliers are distractions at best.
Our system is broken and successive governments of both left and right have, in that Kiwi way, said "she'll be right." Vested and self-interests rule the day. Property owners are stable, and they vote. In 2021, current parliamentarians declared a far higher percentage of property interests that the general population (not a surprise). So the broken system suits them. If the property market was a battered Holden ute, the governments of the past forty years have been the slightly drunk guy, sneaking it home via the back roads from the pub, hoping the journey will go OK and that the local cop is on a coffee break.
As long as real estate is allowed to continue as a largely tax free, speculative investment prospect rather than somewhere to live in dignity, this will continue. My question for the church is, will we continue to take our sides of shallow political self interest, or will we be a voice for change and become part of the solution?
I think it's so bad now, nothing short of a cross party accord will fix it. So as God's people, think of what we are passing on to the coming generations, but also think how we can advocate for a more just and equitable future for all.
Does this get you stirred up? Relax, pastor's pen is supposed to start conversations, not always affirm you in your settled ways. Maybe I've got some things wrong because I'm not an economist, but if it gets you thinking, job done. Blessings, Martin.
Martin I read the same article. When we purchased our home the two of us had good incomes in 1984. We purchased in a less desirable and therefore cheaper area and were required to have a 30% deposit but we were in a Govt scheme that gave tax free status to savings schemes and contributed a 1/7 value of the house value and was not repayable if you stayed 10 years. The main point, we paid what was less an 2 years combined incomes. Now at 12 times I cannot afford my own home as the article points out.
I note the PCANZ records it is sitting on $1,200 million of assets or $400-500 in land valuations. How do we…