Rent or buy, houses haunt Aucklanders

Priyanca Radhakrishnan –

Aucklanders continue to experience soaring house prices, increasing rents and home ownership has fallen to its lowest level in 65 years.

We are fourth in the world relative to income and second relative to rents.

An OECD 2015 Report said that first homebuyers and lower income groups are the most affected by our rampant property market.

However, high property prices also adversely affect Auckland’s economy as businesses are forced to pay more for worker recruitment and retention.

Financial insecurity

An OECD economist warned that house price growth is a threat to our financial stability and urged New Zealand to dramatically increase Auckland’s housing supply.

Out on the campaign trail last week, I spoke to a few people in the Maungakiekie electorate for who, owning their first house was a dream. Their main issue was with renting – rental affordability and quality.

I studied statistics to find out how unaffordable rentals have become and how they compare internationally.

The OECD average for housing costs, which includes rent, electricity, water supply, gas and expenditure on furniture and furnishings, maintenance and repairs, is 21%.

Aucklanders are paying on average 32% of their household income on rent alone! We also have an increasing number of people who are forced to rent as home ownership becomes increasingly impossible.

In fact, in Auckland, half of our adult population is renting.

In Mt Wellington, only 36% of families own their own homes.

The trauma

When my husband and I moved to Auckland a few years ago, we found it excruciatingly difficult to find a place to rent.

When we finally found a place – 55 applications later and purely through the kindness of friends – the rental contract was just for a year. Towards the end of that year, it became clear that the owners wanted to move into the property.

The thought of finding rentals each year and the trauma of transient living forced us to consider buying a home. So, we bit the bullet, valiantly resigned ourselves to a future of beans-and-toast dinners and bought a house.

For many like us, long-term rentals are not a viable option.

One year rental contracts are standard in New Zealand.

If a property is sold, existing tenants can be asked to leave with just 42 days’ notice. You cannot make changes to the property in New Zealand – this includes putting up pictures and painting the walls – unless you happen to have a very understanding house owner.

Embellishing homes

There is so much more to housing than just four walls and a roof. Home is our sanctuary and security after a long work week. Our street and suburb becomes our community.

It is difficult to feel rooted in a community if the threat of having to move hangs over our heads each year.

Precarious living also affects children’s schooling and the stability that families need to flourish. It also makes it difficult to plan.

Shamubeel Eaqub, Economist and author of ‘Generation Rent,’ argues that renting can become a viable alternative to home ownership. However, we need to address short-term leases and review laws around notice periods and reasons for eviction as the German and Swiss have done.

Long-Term Contracts

In many parts of Europe, long-term renting is the norm.

Long-term contracts and more flexibility give tenants the chance to plan for the future. It also gives them more ‘ownership’ of their homes, while allowing owners control of their asset and stable tenancies.

The Labour Party is currently looking into the rental experience in New Zealand, with a view to making it better.

If you are renting or have a renting experience, please have your say at https://nzlabour.typeform.com/to/mSNDpa (you can click on the link in the web version of this article on the Indian Newslink website- www.indiannewslink.co.nz

If you would like to contact our Member of Parliament and Labour Party Housing spokesperson, Phil Twyford, please email phil.twyford@parliament.govt.nz

Priyanca Radhakrishnan is a voracious reader, champions social and community causes and is a strong advocate of ethnic and gender diversity in corporate governance and in public life. She is a Member of the Labour Party Policy Council and lives in Auckland. She is Labour Party’s candidate at the Maungakiekie constituency in the general elections to be held on September 23, 2017.

Email: priyanca@labour.org.nz

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