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Young Aucklanders not giving up on home ownership dream

Young Aucklanders not giving up on home ownership dream

• Majority of young Aucklanders aspire to own their own home
• Just over a third see home ownership as an achievable goal in Auckland
• Nearly half are actively working towards owning a home
• 1 in 3 of those aged 25+ and actively pursuing home ownership are living at home with family and/or delaying having children

Despite mounting challenges, young Aucklanders still have their hearts set on home ownership and many are actively working towards their dream.

Real estate agency Barfoot & Thompson has asked the city’s “next first home buyers” – more than 500 Aucklanders aged 18 to 34 who are yet to own a property – about their future living plans, with the findings confirming the enduring strength of the Kiwi Dream. This is the second survey on the topic of first home ownership conducted by the company, which is again partnering with TVNZ’s family renovation show Our First Home.

“There is a lot of speculation around what first home buyers will be looking for in the future and how they want to live compared to the generations before them. This survey was about going straight to the source,” says Barfoot & Thompson Managing Director Peter Thompson.

An overwhelming 91% of those surveyed say they want to own their own home one day, citing benefits such as stability, financial security and investment potential.

“Many also noted the less tangible sides of home ownership – like having a place to bring up a family, and it being a long-term achievement they can take pride in,” says Mr Thompson. “Others commented on their parents’ hard work and perseverance to own a home, and their own desire to emulate that.”

However, many respondents are less optimistic about the ability to turn their dream into a reality, particularly in the Auckland market, where feelings were split. While home ownership in New Zealand as a whole is seen as an achievable goal by the majority of those aspiring to own a home (59%), just 38% say it is an achievable goal in Auckland for them and others like them.

“Open ended responses pointed to the significantly higher costs of buying in Auckland and difficulty saving the required deposit alongside other living costs as some of the key reasons behind their doubts.

“What is heartening and inspiring, however, is the number of young Kiwis still chasing their goals, even in the face of challenges and their own doubts.”

The survey found that half of young Aucklanders who would one day like to own a home are actively working towards their dream (49%).

“This is a different view from what some may have predicted of Auckland’s young and aspiring home owners, and further supports the view that they haven’t given up on their Kiwi Dream.”

Their top five actions included saving for a deposit (77%), reducing spend on luxury items (44%), looking to buy in alternative locations (27%), living at home with family (27%), and working additional hours, shifts or jobs (24%).

“And the steps being taken are sometimes more dramatic than just saving more and working harder,” highlights Mr Thompson.

Among those making plans, the survey not only showed one in five (20%) respondents aged 25+ are living at home with family to help make their dream a reality, but a similar proportion are delaying having children in order to save money (18%).

“This equates to one-in-three of this group who are delaying either or both of those milestones to help make their home ownership dreams a reality.”

Part 2: The future Auckland market – who are they, and what, when and where will they buy?

Part 1 results at a glance…

• 91% want to own their own home one day.
• Of those, 59% think it is an achievable goal in NZ for themselves and people like them, while 19% do not think it is achievable, and 21% are unsure.
• The idea of purchasing a home in Auckland is seen as less achievable. Only 38% think it is a goal people can achieve, while an almost equal 37% think it is not, and 25% are unsure.
• Optimism decreases with age, with those 25 years and older seeing home ownership as less achievable than those 18 to 24 years old.
• Of those who want to own their own home one day, 49% are currently making plans or taking actions. This includes 46% of 18-24 year olds.
• This is heightened amongst those who envisage a purchase in the short-to-medium term (82% in next 2 years, 65% in 3-4 years), however, 29% are still taking action despite their purchase being 10 years or more away.
• Respondents are pursuing their dream regardless of how achievable they feel it may be to buy in Auckland. For example, of those wanting to buy their own home and taking action towards this, 59% do not see home ownership in Auckland as an achievable goal, but are still working towards home ownership anyway.
• Of those making plans - saving for a deposit is key (77%). But beyond this the key actions are:
o reducing spend on luxury items (44%)
o looking to buy in alternative locations (27%)
o living at home with family (27%) - although this is also related to age/lifestage
o working additional shifts / jobs (24%) - again there is a relationship with age/lifestage
• Of those aged 25+ who are actively making plans, 20% are living at home with family and 18% delaying having children to save money.

*All percentages from point 2 onwards refer to the percentage of the majority of respondents who aspired to own property.

Respondent’s first thoughts on home ownership:
“As we live in Auckland, the current market is very expensive. In a word, daunting.”

“Auckland is really expensive, but a small apartment in the CBD is worth it.”

“I definitely want to buy a house in Auckland in a few years. I know it will be expensive but I love Auckland and want to live near my family.”

“It’s near impossible to buy without assistance.”

“Good idea, people just need to have realistic expectations about home ownership. It’s a hard earned privilege, not a right.”

“Owning a house is an expensive pursuit, but if you've got money saved up it can be great investment.”

Respondent’s thoughts on why they want to own a home:
“It would be nice to have somewhere to call my own that I could have my family grow up in.”

“I would rather put my money towards a home loan than rent. I also would enjoy the flexibility to make changes to my home without having to consult the landlord.”

“It is a solid investment which will increase in value. And once the mortgage has been paid off, it will be useful for post-retirement.”

“A home is one of the most important purchases one could make. It would be my safe haven. I could call it my own. It would be a result of all my hard work over my lifetime.”

“It is a large asset that doesn't depreciate. You can borrow money against the home to buy things like a car. Renting the property out can make it pay for itself.”

“Growing up I witnessed my father work very hard to pay off his mortgage and fully own his own home. To this day I can still sense the pride he feels at owning his home. That pride strikes me personally as something more worthwhile than any feeling I would find from investing in the share market, bonds, KiwiSaver etc.”

“I think it is a good asset and hopefully something that in time will give me something to pass on to my son to better his life.”

*Selection of open-ended responses not statistically representative. Some minor edits have been made for readability.

ENDS

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