Some New Zealand money

Ever more expensive

This week two different reports made plain the escalating cost of housing in Wellington (of course – as always – focussed on home ownership).

The first report made plain the widening gap between housing cost and wages (a.k.a. “housing affordability”):

The average annual weekly wage increase of $28.06 was not enough to offset a $30,000 increase in the national median house price and an increase in the average mortgage interest rate from 5.52% to 5.86%,” the survey found.

In Wellington, this meant that housing affordability dropped by 7.7% for owner-occupiers.

The second demonstrated that while “first time buyers” are finding it harder, property investors are buying up more and more properties:

[A]ctivity among investors who owned two or more properties had hit a 10-year high. Big investors with more than 10 properties were the most active, buying about two out of every five homes in August.

Of course, this all puts more financial pressure on renters, with forecasts suggesting that rents in Wellington will rise even faster than the cost for owner-occupiers.

For those who can afford to buy, they are having to do so further and further away from the city:

The figures also suggested people were looking further afield for a first home, such as in northern Wellington suburb Tawa and in Hutt Valley, while multiple property owners were buying in Karori and other central-city suburbs, including Mt Victoria and Oriental Bay.

How long will it be before only the rich can afford to live in our city? How can we fight to make renting affordable and secure for people of all incomes?

Photo credit: Jason Jones via Flickr.

One thought on “Ever more expensive”

  1. What are your thoughts on the increasing number of property investors/ increasing number of houses owned to be rented out? We need private rental housing for sure- it serves an important purpose. Ideally, renting would be equal to homeownership in many ways, including the degree to which the occupiers of both could make their house into a home. Arguably, having more people renting, especially more middle income people who have traditionally ‘owned’ makes this more likely. Conditions in places like Germany have seemed almost tenure neutral where half of people rent. In the current situaiton I’d argue we need to focus on the private rental sector and improve conditions there, which is obvious, and the reality. At the same time, I have this more idealistic feeling of annoyance (outrage maybe…) about the whole idea of owning property and renting it out to others, and having such power over their living circumstances. People should have autonomy over their home, the old ‘my house, my castle’. Can that be achieved in the private rental sector? I think there is much more potential in state housing, (which we need WAY more of), and obviously owner occupied housing and alternative property ownership arrangements (e.g. multiple smaller houses on shared land etc.). Maybe we need to change our ideas around property and ownership and somehow, the property rights of the renter/occupant of a home. Do you think a renters union could also argue for more state and affordable housing, for tax arrangements that don’t favour property investment etc. when achieving these could mean that the potential for improving the private rental sector is reduced?

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