A good piece by Maria Slade in the weekend on the way in which housing is becoming a matter of intergenerational wealth:
Bank of mum and dad now a home truth
A survey by real estate agency Barfoot & Thompson shows almost half of Aucklanders who bought their first house in the past five years received financial assistance from a family member. And commentators say it’s creating a two-tier market where only those with wealthy parents can hope to own a home.
Property Institute chief executive Ashley Church said loan-to-value restrictions had made “not a jot” of difference to house prices, but had badly affected young people’s chances of buying a home.
“What we’ve now done is we’ve basically said unless you’re in the fortuitous position where you have the ability to fund that deposit through some other means . . . in this case your parents or some other party, then basically you can’t get into the market.
“All we’ve done is move the problem from one area to another and in doing so we’ve created a two-tier buying society.”
Before the old time conservatives start up with the “it was always this way” “nothing to see here” lines, note that this is provably a growing problem. Here’s Bernard Hickey:
The survey showed 47% of first home buyers now have to rely on a handout from their parents to get on the property ladder. Only four years ago fewer than a third of first home buyers had to rely on parents. Back in the 1970s that figure was just 13%. The change shows the increasing role of family wealth in allowing young families to get their start and will raise political debate around social mobility.
“Social mobility” is one of the political Right’s favourite obfuscations. “Sure” (the argument goes) “things are terrible for the poor now, but social mobility proves that things could get better for them if they were only motivated to get out there and work hard!”. It always was a bullshit excuse, but squeezing more and more mobility out of society (locking in inequality through the intergenerational ownership of housing) makes it even worse.
We’re in the process of creating a nation of landed gentry and serfs. Doesn’t that sound like fun…