Sam Stubbs: Simplicity Founder on the growing number of people who doubt they'll ever own a home

Homeownership continues to be the dream for most Kiwis, but a growing number of us think we'll never achieve it. 

Kiwibank's latest State of Home Ownership Report has found 85% of people want to own a home, with most believing it's the key to getting ahead. 

But over two-thirds of non-homeowners doubt they'll ever own a home, with millennials particularly pessimistic. 

Simplicity Founder Sam Stubbs told Ryan Bridge KiwiSaver is now the key for most people, but the long wait to save for a deposit is a problem. 

He says either wages have to increase, taxes have to decrease, or people have to put more in KiwiSaver. 

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Episode Transcript

Speaker 1 (00:00):
We've had some insight into home ownership and new report
from Kiwibank revealing eighty five percent of us think that
owning a home is important and two out of three
of us think it's essential to getting ahead. In New Zealand,
two thirds of non homeowners feel lockdown of the market
and almost half are open to exploring other ways to
get onto it. Sam Stubbs is these simplicity founderies with

(00:21):
us this morning, Sam, good morning, Good morning. You own
a big issue here is obviously saving for a deposit
cost a living crisis makes that very hard. How do
you get over that barrier? I mean, do we just
have to wait until wages go up again?

Speaker 2 (00:37):
Yeah? Look, it's super hard, isn't it. I mean, an
awful lot of people and now using kiwisaver as they're
effectively their first home deposit vehicle, right, And it's pretty
well pretty well sorted for that because you put some
money in your employer book, put some money in and
you can't otherwise touch it really until then, so that
that's working out to be useful. But the problem is,

(00:58):
as you say, even deposits are a very large sum
of money, so it takes a long time to be
saving that. So yeah, I mean, you're absolutely right. Either
wages have to go up, or taxes have to go down,
or effectively we have to spend less on living and
save more via a Kiwi Saver. It's probably going to
be a combination of all those three things over the years,

(01:18):
but it's absolutely tough. You're right. You know. The really
interesting number for me, Ryan is that back in nineteen eighty,
about eighty two percent of New Zealand, New Zealand has
owned their own home. Now it's about sixty two percent.
So since nineteen eighty we've had about twenty percent of
New Zealanders it basically had had to rent because they
couldn't have to buy their home. So owning your own

(01:39):
home is the Kiwi dream is just becoming harder.

Speaker 1 (01:42):
I thought the interesting thing here was sixty six percent
of us say yes, you do need to own a
home in New Zealand in order to get ahead, which
means I mean there's still a good chunk who don't
think that that believe you can get a head through
other means.

Speaker 2 (01:56):
Oh. Absolutely, you know you've got the sheer market, you've
got Kiwi Savior, got investing in your own business, there's
a whole lot of other ways to make money. And
of course, you know, if you look at countries like Germany, right,
you know, more than fifty percent of the population rent,
and they rent because they can rent very long term.
I met a family in Berlin years ago who was
i think to their fifth generation of renting in the

(02:18):
same home, and because they had rights as renters, they
could live there as of right. You know that they
basically couldn't be kicked out, the apartment couldn't be sold
from underneath them. They thought renting was perfectly reasonable and
they'd use the extra money to invest in other stuff.
So it's certainly not the only option. And the thing too,
of course, remember Ian is you've got a whole lot
of younger people who are moving around a lot more

(02:38):
right now. They don't necessarily buy into the dream of
buying a home and living in the same city or town.
You've got a whole lot of older people too who say,
you know what, I'd rather actually sell the house, free
up the money rent so I can spend it on
other stuff that I want in my in my elder years,
as long as I have housing security. So that's the issue.

(02:58):
Once you provide people with curity they know they can
stay there as long as they want. You find a
whole lot of people saying I don't really mind whether
I own own or rent. The other thing too, of course,
is that we've lived in the last thirty years right
in the world where house prices have kept on going up.
So there's this is some and we've had we've had
a tax system which is incentivized people to buy houses

(03:20):
because those gains are tax free. Whereas if you know,
in theory, if you're stuck it in the share market
as a trader or care we save it, you pay taxes.
Now is that going to carry on? You know? I mean,
houses have become so unaffordable, there has to be a
point which the house prices stop rising as fast as
they have in the past, So maybe it won't be

(03:40):
quite as good in an investment as it used to be.

Speaker 1 (03:42):
Yeah, I agree with you there, Sam, I just I mean,
and you look at those reports from Treasury and the
like that say, well and the Tax Working Group that
adding a capital gains tax isn't necessarily going to bring
those prices down. But I take your point.

Speaker 2 (03:55):
Sam.

Speaker 1 (03:55):
Thank you very much for coming on the show. Always
appreciate it. Sam Stubbs Simplicity found For more from.

Speaker 2 (04:01):
Early Edition with Ryan Bridge. Listen live to News Talks
itt B from five am weekdays, or follow the podcast
on iHeartRadio