Nine in 10 adults think younger Kiwis are being "locked out" of the housing market, despite it being overwhelmingly seen as a "ticket to long-term financial security", a new survey has found.
Most people in 'Generation Rent' - aged 18 to 39 - are looking to buy in the next five years, the Financial Services Council (FSC) survey found, but nearly half of them say one of their main strategies is waiting for prices to come down.
"It is becoming more out of reach, and it seems the majority of Kiwis agree, whether they're Gen Renters or not," said FSC chief executive Richard Klipin.
"The barriers to entry are a combination of increasing house prices, ability to save for a deposit and availability of property in areas where people want to live."
House prices have doubled in the past seven years, most of that rise coming in the past 18 months as record-low interest rates made borrowing cheap.
The FSC, which represents insurance companies and financial service providers, surveyed more than 2000 Kiwis in April for their views on investment and housing.
Of those, 559 were non-homeowners actively looking to buy. In addition to waiting for prices to drop (40.4 percent of 'Generation Rent'), they're also cutting back on "lifestyle expenses" (63.5), working overtime (34.8 percent) living with their parents or friends (24.7), taking on second jobs (21.5) or even looking at moving out of the city (21.3).
Eighty-eight percent of all the survey's respondents said banks and financial institutions "should be doing more to support first-home buyers buy their own home".
"Younger Kiwis are seeking support from external sources to achieve their property goals, with the research showing that applying for Government grants, asking for financial assistance from parents and taking out personal loans are also among the strategies being adopted," said Klipin.
"These factors are impacting the overall wellbeing of Generation Renters. Their physical and mental health and their relationships with family and friends are more likely to be affected by financial issues when compared with older generations."
The biggest barriers they cited were affordability (33.3 percent), getting a deposit together (18.6) and finding a suitable place within budget (10).
Some have given up trying to buy a house, and are investing their money elsewhere. Most Generation Renters - 83 percent - said they had money invested elsewhere, mostly KiwiSaver. Nearly half had made other cash investments, including term deposits, nearly a third owned shares in New Zealand companies, and 13 percent were even putting their money into cryptocurrencies such as bitcoin. A small number - 1.2 percent - had bought digital objects like NFTs.
"They're adaptable and creative, and, as we saw in our previous research… are turning to alternative forms of investing," said Kiplin. "They're building their financial capability with micro-investing platforms and adopting new financial technologies that weren't around during their parents' generation.
"This financial innovation is reason for some optimism, but this research shows that Generation Renters need a lot more help to reach the dream of owning a home in New Zealand."