Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Veda’s dubs New Zealand’s Gen Y as Property Orphans

Veda’s dubs New Zealand’s Gen Y as Property Orphans

Auckland, New Zealand, Tuesday 23 September 2014: New data from Veda shows that Generation Y’s home ownership prospects appear to be rapidly declining in New Zealand. Veda, the data analytics company and leading provider of credit information and analytics in Australia and New Zealand, says this may be due to the Reserve Bank’s Loan to Value (LVR) ratios and four successive rises in the official cash rate, which have flowed through to retail interest rates on mortgages.

Gen Y is classified as those under the age of 28 years and Veda describes this perceived trend regarding seeking home ownership as very concerning.

Veda’s credit demand statistics for the past three month period (June, July, August 2014) show that a new generation is emerging that Veda has dubbed ‘Property Orphans’.

According to Veda, younger New Zealanders are no longer applying for mortgages at the rate seen in previous years. Yet they have increased their borrowing through personal loans and credit cards, indicating a shift in their credit habits.

“They are property orphans because their behaviour suggests they may be unable to save the 20% deposit required under the Reserve Bank of New Zealand LVR restrictions (introduced October 2013), and not helped by Auckland’s spiralling property prices,” says John Roberts, Managing Director Veda New Zealand and International.

Veda’s data on all mortgage inquiries (to 31 August 2014) shows 11 months of decreasing mortgage inquiry volumes in 2014.

Across all age groups, inquiries were down by 30.02% in August compared to August 2013 and down 13.74% for the three months to August (June to August compared with the same period in 2013). This is the largest drop in mortgage inquiries Veda has seen since LVR restrictions were first introduced in October 2013.

Most notably, Gen Y’s mortgage inquiries were down 32.27% June to August 2014 (compared with the same period 2013) and Gen X’s (28 to 43 years) mortgage inquiries were down 17.66% June to August 2014 (compared with the same period 2013).

In contrast, Gen Y’s personal loan and credit card inquiries for the period were strong. The rate of increase for personal loan inquiries from Gen Y in the August quarter (compared with the same period in 2013) was 12.10%. The rate of increase of credit card inquiries by Gen Y in the August quarter was 19.66% compared with the same period in 2013.

“Potentially this could indicate a major structural change to the New Zealand economy as has played out in other jurisdictions such as Europe. Gen Y may be showing a similar pattern to that of baby boomers prior to the 1987 downturn when consumer spending was fuelled by unsecured borrowing,” says Mr Roberts. “It looks like Gen Y is seeking to borrow for purchase on consumer items or travel, and has given up, at least for the meantime, a desire for home ownership which may appear unattainable. They might be destined to be renters for life which is likely to have an impact on net savings for this group in New Zealand in years to come.”

---Ends---

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Snail's Pace: Aucklanders Face Frustrating Commute Over Harbour Bridge

Journeys into Auckland's CBD took longer than usual as traffic banked up around the damaged Harbour Bridge. More>>

ALSO:

Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>

ALSO:

Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>

ALSO:

MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>

ALSO:


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>

ALSO:


Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>

ALSO:

NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>

ALSO:

Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>

ALSO:

SAFE: Live Export Ship Carrying 5,800 New Zealand Cows Goes Missing In East China Sea

Livestock carrier Gulf Livestock 1 sent a distress signal at 4:45am NZT yesterday in the East China Sea. The area is affected by Typhoon Maysak. At 4pm a patrol plane spotted a lifeboat - with no people in it - and a man in lifejacket nearby. The ship ... More>>

ALSO:

FMA: Kiwisaver Fees Don't Match Performance

The Financial Markets Authority (FMA) today published an independent report into the passive and active investment management styles [i] used by KiwiSaver providers. The FMA commissioned MyFiduciary to test the extent that KiwiSaver providers were ... More>>