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Nearly 80 per cent of renters across New Zealand lack the resources for a home deposit, according to new figures which Labour says shows many Kiwis are locked out of the market.However, Housing Minister Nick Smith says the numbers are "no surprise", and have not significantly worsened in recent years.
Labour has compiled new data from Statistics New Zealand, saying the figures show the inadequacy of subsidies for Kiwis in search of their first home.
Housing Minister Nick Smith told Checkpoint with John Campbell that if he was in the position of a 30-something couple on a $120,000 household income, he would be "cautious" about buying in Auckland.
According to the data, 78 per cent of renters or 458,000 households had a net worth of $120,000 or less, meaning they would be unable to afford the 20 per cent deposit for an average house valued at $612,000.
In Auckland, the average renter's net worth of $41,000 means they would need to save another $127,500 for a 20 per cent deposit on the average Auckland home, or another $43,250 for a 10 per cent deposit.
While the shortfall is greatest in the Super City, renters in other major cities also face a gap.
In Wellington, the typical renter's net worth of $20,000 would leave them $72,200 short of enough for a 20 per cent deposit, or $26,100 short of a 10 per cent deposit.
Canterbury renters have an average net worth of $39,000, and they would need another $45,000 for a 20 per cent deposit on an average house, or $3000 more for a 10 per cent deposit.
Housing Minister Nick Smith says it is not a surprise that many renters lack significant assets.
MYTCHALL BRANSGROVE/FAIRFAX NZ
Housing Minister Nick Smith says it is not a surprise that many renters lack significant assets.
'LOCKED OUT'
Labour housing spokesman Phil Twyford said the figures "really give us a sense of the problem, of young New Zealand families who are locked out of the housing market".
"You talk to renters and yep there are students, and [for some] it's a choice they make at a particular time in their life…
"But for 90 per cent of renters, if they had the opportunity to own their own home, they would grab it with both hands."
Twyford said the numbers also showed that first-home-buyer subsidies like the KiwiSaver HomeStart grant were "completely inadequate".
'NO SIGNIFICANT CHANGE'
Housing Minister Nick Smith denied the figures were a concern, saying there had been "no significant change" in the relative net worth of renters over the last 10 years according to advice from his officials.
"It comes as no surprise to me that renters tend to have less assets - if anything, I was surprised that 22 per cent of renters actually had assets of more than $120,000."
Smith said the HomeStart programme both provided a government grant and encouraged Kiwis to save more than they normally would, allowing them to withdraw money from their KiwiSaver for a deposit.
"In my view, it is one of the long term programmes that New Zealand needs in terms of improving home ownership."
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