Single-income families ‘poor’

Press, 13 April 1982, Page 26

Single-income families ‘poor’

PA Hastings Unless they get more help, one-income families will become the "new poor." for whom home ownership is impossible, the Institute of Valuers has been told.

Mr R. M. White, managing director of Neil, Holdings, Ltd, told an institute seminar at Hastings that families with two incomes would continue to have an enormous advantage over the one-in-come family as far as financing a house was concerned. He said that the one-in-come family would find it increasingly difficult to bridge the" deposit gap for home ownership, and also to service a mortgage. Mr White said that as far as the cost of a house was concerned, in real terms today's prices had not risen when related to average gross wages.

However, the picture was distorted by tax and high interest rates.

"We allknow that a 20 per cent wage increase may well only give a 14 per cent increase in the pay packet, but it does give a 20 per cent increase in building costs," he said. “Tax reforms could ulti-

mately arrest this widening gap“In general. I believe new houses will get -cheaper in real terms. They may not. -however, become more affordable." Mr White said that demand for housing during this decade would be enormous.

Referring to the high birth rates bf the 1950 s and 19605, he said, “The same population bulge that overtaxed our primary schools, secondary schools, universities, and job opportunities has now hit the housing market.”

New Zealanders were forming households at the rate of 30.000 a year, he said. In spite of this rate, the economy had weakened and the Government had not continued to place a high priority on housing.

“The result has been a reduction in permit numbers of about 25,000 dwelling units a year." Mr White said. in the short term, the downward trend was likely to continue.

"In the longer term, however, the economy is likely to improve and the Government would be well aware of the political implications of suppressing real demand any further." he said.