Home ownership still the best option

Press, 6 September 1989, Page 57

Home ownership still the best option

Last year real estate agents sold more than seven billion dollars worth of residential property which is about 52,875 homes. Estimates show that more than 70 per cent of New Zealand families choose to own their own homes. Why? This year has seen some highly publicised debate over the relative benefits of renting and buying. While there is unquestionably a place in the housing market for both alternatives, the majority of New Zealanders believe that it is better to buy. The national president of the Real Estate Institute, Mr Ron Hewitt, -believes that buying a home is still the best alternative for most people. "The argument of buying and renting is most commonly publicised by economists and focuses only on the financial side of the debate. At certain times, when mortgage interest rates are particularly high, some people believe it is better to rent.

“This is a fairly short-term argument, for interest rates are continually fluctuating and on the whole the capital investment in a house is well worth-while.

"Buying a house is a long-term decision. It offers you some security against inflation and as long as you are paying off a mortgage, your stake in the house continues to increase. You are not just giving money away,” he says. "If you live in rented accommodation all your working life you will have very little to show for all the outlay you have made when it comes to retirement. It also makes you very vulnerable to losing income if you are made redundant or become ill. For all these reasons most people prefer to work towards freehold ownership.”

Mr Hewitt said that buying a house was more than buying an investment, it was also buying security and a way of life.

“There comes a time in most people’s lives when they want to. settle down and raise a family. When you are responsible for dependents, you want the security of tenure that only home ownership can offer. Despite legal protection, the basic facts are that a flat is only as secure as the landlord who owns it. The flat can still be sold, you can still be evicted and you can still be left, quite literally, holding the baby. “Quite apart from this, there is

also the question of pride. Many people take great satisfaction from improving their home. Some people undertake largescale renovation, while others may just lay a concrete path, or plant trees and a garden. “When you own a home you are free to do as you wish and all improvements are for your own long term benefit,” says Mr Hewitt. Mr Hewitt said that New Zealand, unlike some other countries, had a real home-owning

philosophy. He said that home ownership contributed both to status and a sense of community. “If you compare the? character of an area that is dominated by rented accommodation with an area that is privately owned you will usually find some significant differences. Home ownership gives a sense of permanence and encourages people to become actively involved in community activities. “People are more likely to take the time to get to know their neighbours. They form resident’s associations and establish com- , munity groups, playcentres and so on. It is also reflected in the growth of carpools and sports clubs.” Mr Hewitt said that while many New Zealanders do choose to rent at some point in their life, it is usually a temporary measure that involves establishing themselves and saving for a house deposit. “New Zealanders are very independent people. They like to own their own patch of dirt where they can do as they please. The idea of having to ask permission to change the colour of a wall, or alter a light fitting is very offputting. This is exacerbated by the fact that many New Zealanders seem to thrive on do-it-yourself. “An Englishman’s home is his castle, but in New Zealand we have many cultural groups who also share this ideal. The important social goal is that home ownership should be a realistic option for anybody who wants it. If there are people who cannot currently be housed then society as a whole should study the situation and improve it. Housing is a right that is essential to our sense of community.”