Home-ownership dream starts to fade
By LIZ MCDONALD - The Press | Tuesday, 15 May 2007
More New Zealanders are delaying or abandoning their home-ownership dream as rising house prices and interest rates continue to bite.
A new survey has revealed that 17 per cent fewer New Zealanders intend to buy their own home in the next 12 months than were planning to a year ago.
The drop-off was strongest among those earning under $45,000 a year and for people outside main centres.
The survey, by researcher Roy Morgan New Zealand for mortgage provider Wizard Home Loans, was done in February as house prices hit a national high and reports showed the affordability gap continuing to widen.
The median dwelling price in the country is now $343,000 and house-price growth sits at 10 per cent after five years of fast-rising prices. Last year's Census showed that only two-thirds of New Zealanders own their own home, down from nearly three-quarters in the early 1990s.
Christchurch woman Amy Hyland, 26, is one of those who has delayed buying after realising what a first home would cost.
"We had a look around at a few places and I just got put off because what we could afford was just not what we wanted to buy. I've put the plan off for now, for probably at least a year," said Hyland, who is single and had intended to buy a house with her sister.
"It just seems too hard and I just want to see where the market will go with prices and interest rates."
Hyland said that as a young lawyer, still living at home and with no student loan, she was in a better position than many but still could not afford the first step on the property ladder. "You need to spend such a lot to get something, the mortgage was looking too scary," she said.
Wizard's national director of business, John Grant, said the study showed the impact of market conditions which made people take a hard look at whether buying their own slice of New Zealand was a possibility. The trend towards putting off buying a first home was accelerating, with the drop in the number of intending buyers doubling from 8 per cent the previous year.
But the decline was not across the board, with the home-buying plans of those earning under $45,000 down by 38 per cent, but higher earners' buying expectations were steady.
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