11 Dec 2020

Please, no more stories about young people buying houses

From Mediawatch, 7:34 pm on 11 December 2020

Analysis: As the housing crisis continues to spiral out of control, Hayden Donnell calls for a moratorium on stories about young first home buyers.

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Photo: Screenshot

Stuff’s latest story about a pair of young home buyers follows a familiar structure.  

It starts out chronicling the couple’s efforts to save for a deposit, before transitioning into their eventual against-the-odds triumph in a competitive auction.  

In the 15th paragraph the story takes a turn, revealing that saving and self-denial might not have been the main factor behind the purchase.   

The couple, both 28, had never rented. They’d stayed with a parent their whole lives. One of them had been helped into a first home by their parents four years ago, and used that property to help leverage them into their current place.

The story is by no means the first, or the worst, of its kind. Media organisations are famous for framing stories about young homeowners as a how-to guide to getting on the property ladder, only to reveal late that the buyers’ secret was “having rich parents”.

In 2018, 21-year-old property magnate Jonathan Brownlee told the Herald that aspiring homeowners could emulate his success if they worked hard enough. It would also help those potential buyers if, like Brownlee, their parents topped up their savings to give them a deposit on a first property. 

In 2017, Stuff credited diligent saving with helping a 21-year-old into her first home

Other potential factors included living with her parents for free, and those parents acting as guarantors for her home loan. 

The list goes on. Jake and Ella Horan can afford their Westmere home because they rent it out for half the year while they live for free with their parents. Caeli Gunderson started her rental property mini-empire after inheriting two houses from her mother

Admittedly, a few stories about young homeowners don’t eventually divulge substantial parental assistance.

In 2016, Ashley Verheul told the Herald her property investment was partly underpinned by a decision to view food as an optional luxury. 

“This is the most variable need we have as people and it always comes into my budget second to savings. Once you have calculated your basic needs, you decide how much you ideally want or need to save,” she said. “Then what ever is left over after that is left for food."

Verhaul did suffer a little because of her decision to exchange sustenance for property. 

"I mentally had to tell myself that food is just fuel for your body, cause of course you get sick of eating the same things over and over,” she said.

We need a moratorium on these stories.

It’s not just that they sell their readers a false bill of goods. Even if they all told the tale of young people who by some miracle had managed to grind their unused avocado stones into a first home without the help of their parents, the implication behind them would be insulting.  

The fact is that houses cost about two times the median household income in the 1970s, and less than three times the median income in the 1980s. 

They now cost roughly seven times the median income across the country.

In Auckland, where a house routinely makes more money per year than the average worker, that ratio is approaching 10. Demographia rates housing markets as severely unaffordable when the median multiple is more than 5.1.

Since 1995, land prices have risen 73 percent faster than incomes. The country has a shortage of roughly 100,000 homes. 

These are real, structural factors which make it incredibly hard for many first home buyers to scrape together the money for a deposit in today’s market. 

Though media organisations do a good job of covering that crisis, their stories about young home buyers can serve to undermine that coverage. Whether deliberate or not, their message is that the housing crisis isn’t as bad as the reports say. They whisper to property-owning readers that the people getting antsy over their inability to buy a house are overreacting.

That could feel like a slap in the face to the thousands of people who can’t save the $100,000 it now takes to put together a 10% deposit on even the median house in Auckland,

It tells them their struggles are due to their own personal failings or lack of savvy. In reality they've been locked out of the housing market not by their addiction to avocado, but by older generations and successive governments essentially lighting the property market on fire and walking away

Instead of reflecting that reality, young home buyer stories serve to obscure or minimise it. They leave readers less informed. They fail to tell the unvarnished truth. Without those qualities, do they really count as good reporting?