Buyers ‘face hardship’ for bigger home

Press, 2 January 1985, Page 1

Buyers ‘face hardship’ for bigger home

PA Wellington Second home buyers whose income has decreased as their families have increased face genuine hardship in servicing the mortgage for a bigger home, says a Wellington real estate agent, Mr John Kennedy.

He has suggested in an open letter to the Minister of Housing, Mr Goff, that the Post Office home ownership account scheme be extended to meet the needs of these people. “There is no reason for this savings account to be stopped just because the first home is obtained,” Mr Kennedy said in his letter, published in “New Zealand Real Estate.” “The first homeowner should be encouraged to save for the second home thereby leaving his first home available to the

new homeowner,” he said. The letter pointed out that the first home-buying husband and wife generally both worked and could earn up to ?30,000 a year. When children arrived the family became a one-income unit and earnings decreased significantly. “A family so placed has great difficulty in servicing at market rates either an additional mortgage to build on a further bedroom or for buying a second home with four bedrooms,” Mr Kennedy said.

He said local authority rentals, which were “well below market” and discouraged private developers from building rental accommodation, should be reviewed. “Local bodies should be required to raise their rental levels up to nearer market level and for the rentals to be reviewed annually by a registered valuer,” he said. Rental of local authority housing should be incomerelated, so that those on a higher income paid a higher rental, Mr Kennedy said.