>>> New Zealand's foreign buyers ban brings home scale of crisis
Eleanor Ainge Roy https://www.msn.com/en-us/money/realestate/stress-is-huge-new-zealands-foreign-buyers-ban-brings-home-scale-of-crisis/ar-BBM2WmW?li=BBnbfcN&ocid=mailsignout
At 55, Gem Pritchard has given up on the dream of ever buying a home for his family. The single father’s decades of work in the construction industry have essentially come to nothing.
According to statistics New Zealand, home ownership is at the lowest point in 66 years, and on Wednesday the government passed a ban on foreign home buyers, part of a suite of measures aimed at addressing the housing and homelessness crisis.
“I’ve been working since I was 15. It has gotten harder and harder. The housing crisis is exactly that – a crisis. And it is not showing any signs of changing,” says Pritchard, who rents a house in the Auckland suburb of Sandringham for more than NZ$500 a week, and has recently lost his job.
Related: 'Tenants on our own land': New Zealand bans sale of homes to foreign buyers
“Not having a permanent home creates an absolute and utter emotional toll. Not only on one person but across families, across relationships and communities. The stresses involved in not having that kind of security is just huge.”
A report by the Economist in 2017 found New Zealand had the most unaffordable house prices in the world, with those in Auckland climbing 75% in the past four years, although the market has cooled in recent months.
David Parker, associate finance minister in the center-left Labour coalition government, has described New Zealanders as “tenants on our own land” and said the “great Kiwi dream of homeownership” is no longer a possibility for many.
Before the ban, New Zealand had become a destination for buyers from Asia and America and gained a reputation as a bolthole for the world’s wealthy, who view it as a haven from a potential nuclear conflict, the rise of terrorism and civil unrest, or simply as a place to get away from it all.
Land sales to foreign buyers boomed under the previous center-right National government, with 1.16 million acres bought in 2016, an almost six-fold increase on the year before. That is the equivalent to 3.2% of the farmland in a country of 4.7 million people.
But the ban won’t touch mega-millionaires like Peter Thiel and James Cameron
, who gained citizenship in New Zealand, allowing them to buy homes under the previous legislation and the new measures, too. However, preppers, or survivalists, will now have to look elsewhere, with isolated bolt-holes such as the Australian state of Tasmania
and some Pacific Islands
potential possibilities being discussed by the community.
‘People are starting to break’
But Joe Carolan, chair of the Unite Union’s Auckland housing committee, says “scapegoating” immigrants isn’t the solution, and the government needs to increase investment in social housing by building 100,000 state houses in a decade – houses for professional workers pushed out of the market, as well as those on low incomes.
“There is a whole group of people being squeezed. People who are middle-class professionals are being murdered by rent. My rent has gone up NZ$185 in three months,” says Carolan.
“So this is where you are starting to see industrial action driven I think by the housing crisis. Why are workers striking? It’s because the rent is sucking the wallet dry when it comes to wages. And that’s when people are starting to break.”
New Zealanders have long been inured to shoddy housing conditions but as the housing crunch bites they face worse conditions than ever before. They are unable to afford their own homes and cannot demand better conditions for fear of being evicted, or having their rent raised for being difficult tenants in an overheated market.
“Security for family life has been so compromised. Just trying to keep your children in a zone for a school, trying to keep friendships alive, there is no security when you don’t own your own home,” he says. “And after 10 years on the hamster wheel I would just like to come home to a place that is our own. Little things like being able to paint the house or plant a garden are important.”
Tim Hazledine, a professor of economics at the University of Auckland says New Zealand’s housing crisis is a symptom of its desirability, but unlike other popular cities such as Hong Kong, Vancouver and Sydney, wages in New Zealand are middling among their OECD counterparts.
“It may be a macro economic issue – we can’t afford to live in our own country,” says Hazledine. “In a sense it is a nice problem to have because Auckland is such a desirable place to live. I have a feeling we should be more conservative with our land. In New Zealand we are quite short-term in our thinking. We sell our land because, well, it’s a lot of money, but in a generation’s time our children won’t be so thrilled about that.”
Pritchard worries his 17-year-old daughter will never be able to own a home. She is in precarious work and saving is “impossible” after rent, bills, food and car costs.
But Hazledine sees a silver lining, saying the foreign buyer ban should take the stress out of the market for a while, allowing young people to use their “sweat equity” to get ahead.
“I think a 30-year-old will be able to buy a house in Auckland, but they have to compromise,” says Hazeledine. “More apartments, more small houses, more tiny houses and people willing to take something in a not very good location and spend their weekends doing it up.”
“You don’t have much money but you have healthy bodies. This is not a panacea, but it is an option a lot of New Zealanders have taken for a long time.”