by Michael Littlewood
At the Labour Party conference, politicians pointed to a fall in ownership rates as reason for the government to get involved.
Lobbyists such as David Skilling from the New Zealand Institute believe the census data supports his view that New Zealand’s economy is “hollowing out”.
The annual censuses relied upon by the politicians and pundits indicate home ownership dropped from 74% in 1996 to 68% in 2001.
However, an analysis of the data by Michael Littlewood shows the census does not support the “falling home ownership” story.
“The most that we know is that the declared rate of home ownership has fallen, but even that change doesn’t necessarily tell us what is really happening,” Littlewood says.
“Declared ownership rates between 1986 and 1996 have dropped back to about the levels we saw in the 1950s to 1970s.
"Perhaps ownership rates are settling back down to their natural levels after an unusual period above 70%. Very high inflation, negative real mortgage rates and negative net real returns on other investments were possible causes for that.
“Aside from 1986-1996, declared home ownership rates have been remarkably consistent for around 50 years despite turbulent change in New Zealand.
“Another major gap in our housing numbers is that we don’t know whether dwellings empty on census night were owned by their usual occupiers. In 2001, empty dwellings were nearly 10% of the total housing stock – and the proportion is probably rising.”
Littlewood speculates that more than 90% of these so-called “empty” dwellings were privately owned by someone, maybe even by the usual “occupiers”.
The final gap is the probable rise in ownership levels by family trusts.
“In such cases, the apparent ‘owner’ will rent the family home from the trust. The legal position is that the occupier doesn’t own the home. The substantive position is different. We don’t know how many homes are owned by family trusts (although the last two censuses have tried to find out) but we do know that the proportion of “not specified” answers to the ownership question has grown from less than 1% in the 65 years to 1981 to about 8% in the last two censuses.
“The “not specifieds” that are really family trust owners should be in the “owner occupier” category. The same should happen to the “renters” from family trusts who are really “owner occupiers” for the purposes of this part of the census.
This alone would tend to increase the number of “owners” and reduce the number of “renters”.
“When people say that home ownership levels have fallen, they can’t rely on censuses to support their case. We need to know more about what’s really happening before the government can use this as a basis to spend taxpayers’ money on new homeownership initiatives.”
Statistics New Zealand has advised that there will be more detailed questions in the 2006 Census on the question of family trusts and home ownership.
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