Why are Kiwis so hell-bent on owning their own home?

In many countries, renters are content with their lot, so why are Kiwis so hell-bent on owning their own home?

Trade Me Property sales director Gavin Lloyd puts it down to two things: the enduring quarteracre dream, and the promise of big returns.

‘‘We have seen immense growth in property prices in the past five years and based on the current rate of price growth, you’re almost guaranteed to see an increase in value,’’ he says.

While the quarter-acre dream is further out of reach than ever before, with deposits too large for most incomes, Lloyd says that doesn’t mean the dream is fading.

Elham Bahmanteymouri, Auckland University lecturer in urban planning, has a different take — the quarter-acre dream isn’t just an historical hangover or even a cultural phenomenon – it’s driven by economic realities.

‘‘In New Zealand, people are obsessed with home ownership because, simply, it brings security for people – for their future, their time of retirement, and many other aspects of life.’’

‘‘It is linked to more security and definitely from the economic point of view less cost for the people.’’

Across the country, it costs the average first home buyer just $18 extra per week to pay off a mortgage than renting a home, according to CoreLogic data from June.

As Bahmanteymouri points out, when you’re paying a mortgage, you’re paying off an asset that’s likely to be increasing in value.

‘‘The point is that it’s an investment, you own something for yourself that you can sell anytime,’’ she said. ‘‘By paying rent people do not own anything, they just spend their money for nothing, for shelter that is not permanent.’’

Because inflation of house prices was higher than the general economy and mortgage interest rates, it also meant housing was more or less a

no-lose investment, Bahmanteymouri said.

The unscientific measure of FOMO (the fear of missing out) is also often alluded to by economists as contributing to increasingly exclusionary prices, which jumped nearly 30 per cent in a year.

In many Scandinavian countries and some states in southern Germany, local councils own large swathes of land and often hold larger stocks of social housing, Bahmanteymouri said.

In Germany and other more industrialised nations there were also often large rental areas

created during the 1960s, 70s and 80s to cater to workers, which remain today, alleviating housing pressures, she said.

New Zealand, which was a largely service-based economy in city centres, working in the likes of IT and education, had never built up this kind of dense housing.

‘‘In some states of Germany there isn’t any alternative, people are not allowed to own their property, the land is owned by the government or by city councils, and they can just rent. It’s a type of social democracy system of governing.’’

‘‘When there isn’t an alternative then homeownership is not a dream as it is here.’’

In Sweden, there was actually a renters’ union that bartered with landlords to set the price, rather than the landlords dictating, Bahmanteymouri said.

‘‘I believe the left party in Sweden is more radical than the left parties in New Zealand. Basically we are obsessed with some employment and ecological issues and not [housing].’’

Another contributor to Kiwis’ obsession with owning is the limited rights of renters. As Lloyd points out: ‘‘If we compare New Zealand to other parts of the world, Kiwi renters do not have as many rights. ‘‘Up until recently, tenants were not allowed to make minor changes to a property without consulting their landlord.’’ Changes to tenancy law in February allowed renters to make alterations to a property which landlords could not decline if they were deemed minor.

Minor changes are things that can be easily reversed, are low risk to the property, and don’t require regulatory consent. Examples include changing curtains, babyproofing (for example installing a baby gate), and earthquakeproofing, for example securing a bookshelf to the wall.

Grey Power manager of health policy Joanne Reid said superannuation was based on the retiree owning their home, but homeownership data from the 2018 Census found leading up to retirement age (60 to 64 years), about one in four people did not own the home they lived in.

As part of the Ministry of Social Development’s Ageing Well National Science Challenge, researcher Kay Saville-Smith predicted home-ownership among retirees would plummet in the years to come.