Kerre Woodham: Do young people still see homeownership as a goal?

Back in the day, when I first got this job, I was desperate to buy a house. All of a sudden I was earning enough to pay a mortgage, but after years of living on a waitress's wages and being a single mum, I didn't have the deposit. I would now be able to start saving for one, there was a bit left over after expenses, which was a new and wonderful feeling. But it seemed such a swizz to be paying more than a mortgage in rent every week when that could be going towards a house and security for my daughter and me.AdvertisementAdvertise with NZME I was very lucky then that my partner, later husband, now ex husband, had a rental unit in the South Island that could be used as security for us to move into a cottage in Grey Lynn. He had the security, I had the wage, it was a beautiful thing until it wasn't. Um, nobody wanted to live in Grey Lynn at the time, wasn't at all fashionable. And although I thought it was a palace, our home was described in a story I did with a magazine as shabby. But we loved it, absolutely loved it, and it was our home for 20 years, which, to make a short story very long, is why I think it's a jolly good idea from National to increase first home buyers' access to low deposit mortgages if they become government. Their stated intention is to get home ownership rates back to their historical peak of 74% and that was achieved by the country back in the early 90s. Since then, home ownership has fallen to about 66%. Now there are all sorts of benefits for the community, for the country, not just for the young families who own their own homes, if you get home ownership rates up. It's a worthy aspiration. Right now, first home buyers account for nearly 29% of all home purchases, representing the largest single cohort in the current housing market as they take advantage of the correction in the housing market. So will lowering the deposit required make a difference? CoreLogic New Zealand chief property economist Kelvin Davidson was fairly neutral when he spoke to Early Edition this morning. "I don't think it's going to transform things. I mean, it's going to be great obviously for those individuals who were previously shut out because their income was just a bit high, they'll now be able to potentially get in under this loan scheme, but it's not going to flood the market. We already know first home buyers are really strong anyway, um, and and values are still pretty flat despite that demand. So good for those individuals, but I don't think it sort of transforms the housing market for sure." Really? But if you're renting right now, surely the lowering of the deposit would make a huge difference for you. 5% is a huge difference from 10% You genius mathematician, Kerre. But you know what I mean, like trying to get a 10% or a 20% deposit as some people had to do was, you know, it was a Herculean task and it seemed so far, it's a bit like the opposite of what the the student loan absconders are doing. Their debt seems so huge that they can't begin to tackle it. When you've got a 20% deposit to find, it seems like such a huge sum you don't even attempt it. Whereas 10% becomes doable, 5% very much so. If you are renting right now, does the thought of buying appeal and does 5% make it doable? Like really doable. When you look at how much you're paying in rent, have you done the sums to see what a mortgage would look like for your first home? Is it even something you aspire to these days or did the huge jump in house prices knock the confidence out of you when it came to owning a home? I've got friends, young friends, a couple, he's 40 and the other is 34 and they've said no, we'll just rent. They don't have children, they probably won't have children, they'll just rent and use the money to save a bit and travel a bit. They've had a long hard look, big talks about it, and they've decided no. They'll save for their retirement through KiwiSaver and a separate savings account and use the rest of the money to travel. They just don't want to, they've decided they don't want to buy into it. I'd love to hear what you have to say on this. If you're renting right now, does the 5% threshold as promised by National make you think, you know what, I can do it? LISTEN ABOVE