Homeownership has long been touted as the great Kiwi dream, but not everyone’s looking for a permanent fix. Jihee Junn explores the rising phenomenon of renters by choice

Homeownership has long been touted as the great Kiwi dream, but not everyone’s looking for a permanent fix. Jihee Junn explores the rising phenomenon of renters by choice
Houses in Auckland. Photo Getty Images.

By Jihee Junn, The Spinoff.

Even if I had a hundred grand sitting in the bank for me to spend right now, I’m not sure buying a house would be my first or even my second option. Instead, I’d probably use it to pay off my student loan (which is still well into five figures), do a bit of travelling (a few months in New York City would be nice), and maybe even treat myself to few luxuries (an iPad, a new-ish car, perhaps). 

More likely than not, I’d probably use that money to source myself my dream rental – an apartment all to myself, centrally located with clean, modern facilities. Not too big but not too small. A balcony and a room with a view would be good too; in-built air conditioning even better. 

Other than the obvious financial barriers, there are a few reasons why owning a home has never really been a priority for me. Personally, I’m not really a fan of making huge commitments, and I value being able to move around as I please, unshackled from the responsibility of long-term material possession. I’ve also witnessed how hard and long-winded it is to pay off a mortgage first hand (it took my parents pretty much my whole life to finance the family home), while I’ve been lucky enough to live in decent rentals with decent landlords who haven’t ruthlessly kicked me out. 

Renting has long been considered a temporary state of being in New Zealand – a mere layover before reaching your final destination, often in the form of your own house in the suburbs with a partner, kids, and job for life. But homeownership over the years has become increasingly unaffordable, leaving many with no choice but to rent. In 1991, 26.2% of households rented, but recent Statistics NZ data suggests the percentage of renters has risen to 34% with the number of households renting their homes increasing at almost twice the rate of those who own. 

For the most part, house prices have unwillingly forced New Zealand into becoming a nation of renters, and while many still aspire for homeownership, others have started to see renting as a more logical option. In Australia – which has a similar culture around homeownership to New Zealand – a recent survey of 600 private renters in Sydney and Melbourne found that a third responded positively to the prospect of renting for 10 years or more, mainly because they considered it to be more affordable, more flexible, and with fewer worries and liabilities. 

On top of all this, many of our lifestyles have changed drastically since the days of peak homeownership. Fueled by technology and a shifting workforce, we tend to move cities more, change jobs more, and live in denser, more urban areas. We also marry less and have fewer kids, making stability – often a top priority for buying a home – far less of an incentive than for previous generations. 

Based in Wellington with her husband, Claire* says being able to move “at the drop of a hat” for job opportunities serves as an important factor behind her choice to rent. 

“We see ownership in this current environment as a form of shackling ourselves to a millstone. It’s expensive to have a mortgage, plus you have to administer all the boring bits yourself. We’re also reasonably career-focused and have very little patience for DIY and repairs. We like to outsource as much of our lives as possible and focus on what we care about,” she says. 

“Renting also allows us to live centrally which is important for our lifestyles. To buy would mean living on the outskirts of town or out in the regions, and we’re not into long commutes.”

Auckland-based Naomi also cites similar reasons for being a renter by choice. “I’ve already moved cities twice for work and will inevitably move again, so renting suits me as I’m not tied down,” she says. 

“Secondly, I’ve been very lucky and have had great landlords, so I enjoy not having to sort out household stuff myself. Broke the loo seat? Tree branch down? It’s great handing that stuff over.” 

Sam, a Wellington-based renter in their forties, also values being able to live centrally and admits they have “zero interest” in the sort of maintenance work that often comes along with owning a home. “I also don’t have kids, and it’s unlikely I ever will, so I’ve never had the pressure to provide a stable environment or continuity of school zone, [although] I really think it would be different for me if I had kids.”

The current state of New Zealand’s housing market is another recurring factor among renters by choice. Jane, who lives in Auckland, says she chooses to rent because the downsides of buying are simply too big. “As a renter, I share a warm, well-ventilated, affordable Grey Lynn flat with people I like. I can afford to travel when I want and have a decent amount to invest in the (currently booming) share market each month. As a homeowner, I’d be poorer, less comfortable and more stressed. And for what? Just to live by myself? It doesn’t seem worth it.

“Every few months I reconsider my decision not to buy, but 20 minutes scrolling through Trade Me fixes that quickly. I find myself getting irrationally angry by the state of ‘affordable’ housing in Auckland. The idea of spending half a million dollars on a place I don’t want to live in – a shoebox city centre apartment or a dilapidated Mt Wellington unit with breezeblock walls – seems completely crazy.”

Meanwhile, Wellington-based Maria says she now chooses to rent after losing her home in the US following the 2008 global financial crash. “My partner lost his job and our house value had fallen such that we were completely unable to sell it. We let the bank have it and moved here. We haven’t looked back since,” she says.

“While we could probably manage to buy a house [in New Zealand], what I’ve come to believe is that homeownership only puts you into debt to the bank. It gives the bank control over your life in ways that really constrict what you do.”

“I don’t want to get on the property ladder again in the hopes that house prices will climb forever and screw future generations. I’d much rather just rent and advocate for strong tenant protections, more state housing, and radical alternatives that make it possible and desirable to transform our ways of living so that we don’t destroy the planet.”

In fact, all renters by choice unanimously agreed that tenants rights in New Zealand needed drastic improvement, especially when compared to countries like Germany or Sweden where long-term renting remains a common practice. 

“I’m appalled by the lack of rights tenants have in New Zealand and how poorly you’re treated by agencies. It truly is the only negative thing about this country,” says Laura, a Wellington-based renter originally from Ireland. “We’ve never missed a week’s rent in over three years, always have perfect inspections, and we’re still treated like scum by the agency we rent from.” 

“I do think that New Zealand would greatly benefit from some of the rental protections put in place elsewhere in the world, such as rent control and decade-long leases, to cultivate a sense of security for those people who prefer not to buy. But let’s face it, I’ll have to move back to Europe if I want this type of thing in the near future.”

While some improvements to renter’s rights have been made in the past year, such as banning rental bidding and limiting rent increases to once a year, rental insecurity remains a constant source of stress for many tenants. Research from Australia suggests subpar tenancy law reflects broader cultural values that associate the meaning and making of home with homeownership. As a result, many tenants struggle to feel at home in their rental property which subsequently impacts psychological health and overall well-being.

“Most rental properties are barely liveable… and that messes with my mental health,” says Sam. “I’ve spent some time in the US where, for all their problems, long term rentals [in cities like] LA and San Francisco are warm and dry, while rentals in New Zealand are mostly damp and sad. Short term leases are a real downside – I’d sign a five-year lease in [a heartbeat].”

A lot of people in their 20s and 30s right now will likely be resigned to being long-term renters. Many will be disappointed – a lifetime of property inspections and yearly rent increases seem pretty depressing. But to be honest, so does 30+ years of mortgage repayments and thousands spent on rates.

There are so many positives to renting, and in many countries, it’s a mature thing to do. But our appalling state of housing, lack of tenant protections, and out of control prices means many of us are forced to experience renting purely at its worst – cold, damp, crowded, stressful, and wildly unaffordable. I‘ve been lucky enough to avoid this in the last few years I’ve been renting in Auckland. Now we just need it to be a rule rather than an exception.

* All names in this story have been changed.

Jihee Junn is a staff writer at The Spinoff. This article first appeared on The Spinoff here and is used by interest.co.nz with permission.

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Bad money drives out good.

In wealth management, cash, for most of times, are "BAD money" whereas capitals (strategic infrastructure, commercial buildings, residential buildings, durable assets, government bonds) are the "GOOD money". And ppl chase the "GOOD money".

After the GFC in 2008, we see reserve banks all over the world printed out lots of free money (bad money) which flooded markets and drove capital (good money) out of touch of average persons.

Renting by choice is actually renting by force.

In wealth management, cash, for most of times, are "BAD money" whereas capitals (strategic infrastructure, commercial buildings, residential buildings, durable assets, government bonds) are the "GOOD money". And ppl chase the "GOOD money".

Where did you pick up this wisdom? It's not necessarily wrong, but if for example you looked at the extent to which commercial property targeted at retail in the U.S. or golf courses in Japan have been decimated, how is that considered to be GOOD money?

Exactly! I don't think there are many people renting by choice (myself included), it's become a necessity due to massively overvalued property prices.
What a bloody shambles we've created.


Weird article. Most people described here aren't renters by "choice". They are renters because the spiralling costs of home ownership (relative to incomes) makes it an incredibly unattractive option.

If you set incomes and house prices to similar ratio they have been for generations, many of the same people in the article would "choose" to buy their own homes.

Agreed Miguel
From a financial perspective very naive.
One could be critical of a number of statements. One such is "I’d much rather just rent and advocate for . . . more state housing"; i.e. translated it means "mummy State needs to take financial responsibility to provide for me".

No, nanny state need to take care of those that can't afford to pay a market rent from their own income,and delivery an economy that means workers can earn enough to pay a fair rent, not prop the BS rental market up with accommodation supplements handed out indirectly to landlords. State is going to pay either way, but better to pay itself and own the assets (state housing and land).
Accommodation supplements are nothing other than a market distortion.

The accommodation supplement is a handout to landlords. We need to work towards eliminating it.

"government help that is helping others but not helping me should be eliminated" Nice mentality

Well either we'd have a ton of empty rentals earning landlords nothing and people on the streets, or landlords would have to accept market rates, not rates jacked up by government subsides.

There is no option but to rent for nearly half a million "guest workers" in NZ.
The journey of a new migrant in NZ begins with waiting in long queues for viewing high-rented, substandard houses in the poorly-connected, outer suburbs of major cities while they survive on 'lower than average' wages.
Then we wonder why we neither attract enough skilled workers nor retain the select few skilled ones we train.

Well said. Good to read a comment that distinguishs between immigrants that are clearly good for us and those that are not. Put house prices back to where they were when I arrived in 2002 (maybe 4 times an average salary where I was looking to buy) and NZ could pick and choose the very best skilled immigrant.

Not quite true, I remember people in the 80s and 90s, quite a few were renting then because it was the easy way and their spending habits were not good. You can choose to rent or buy a house. There is a choice. The statement, aren't renters by "choice" is not true.

If you and your partner work hard, SAVE money and really try hard, and put their minds to it, house is possible even now.

Many of the same people in the article would "choose" to buy their own homes, this statement is also not quite true either , they have to want their own home and TRY their best to achieve this . not give up and blame economics, the Government, banks etc

Totally agree

@miguel , you are simply wrong .............all over the world people rent accommodation in preference to home ownership .

Shamubel Equub , a well respected NZ economist , has rightly pointed out that renting a small home or apartment in Auckland that would cost $1,000 a week to own , for a rent of $500 per week and putting the other $500 in the NZX over 5 to 10 years would have put you in a way better position than home ownership .

Buying a home is not as simple as getting a dog , which is a 10 to 15 year commitment .

Mortgages run for 30 years , and can be a burden , especially in Auckland with rates around $4,000 per annum and Insurance of $2,000 per annum , apart from maintenance , levies in some cases , and the risk of interest rates rising .

Its a life-choice , and buying a home kind of locks you in , reduces a lot of freedom to move , work in another country or another town or city without major upheaval .

And in some countries more than half the population are renters

Great that you feel happy being a longer term renter, and that is a choice you have.
The sad thing is that there are many who prefer the financial and intrinsic security of home ownership - which you acknowledge renters don't have - and are currently unable to achieve the goal of home ownership due to housing affordability. Unfortunately renting for life is increasingly becoming a default position.
The financial reality for the long term renter is grim; they are going to pay of the landlord's mortgage, rates, insurance, maintenance and return on their investment and walk away with all the capital gain while the renter walks away with nothing.
As long as you feel that the intrinsic value of renting is worth that, then you are making the right decision for you.

The financial reality for the long term renter is grim

Perhaps...in countries such as NZ. OTOH, in countries such as Austria or Germany, being a renter is not actually a death knell. In fact, it's a more ideal situation as the choice to rent or buy is more of a consumption decision.

"Fueled by technology and a shifting workforce, we tend to move cities more, change jobs more, and live in denser, more urban areas. We also marry less and have fewer kids, making stability – often a top priority for buying a home – far less of an incentive than for previous generations."

This seems to get the cause and effect the wrong way around. it makes it sounds like people just don't really want to buy homes because they are really enjoying being single and childfree and moving around a lot for work and changing jobs a lot and having to live far from friends and family. This might be true for some people, but for most I suspect it's the other way around - most people would like to own a home and raise a family in a stable environment close to friends and family, but insecure and low paid work combined with rising housing costs mean that they don't have the finances and stability they need to do so.

....insecure and low paid work combined with rising housing costs mean that they don't have the finances and stability they need to do so.

Yes, but that is not uncommon in many developed countries for Gen Y and Z. The NZ suburban lifestyle is not necessarily suited for the economic backdrop of 2020. What was suitable in the 1950s-80s could actually be a hindrance for what people need now.

But isn't it pretty depressing that what people need now in order to do well economically makes it so difficult to do the things that people find most valuable, like being part of a community, be able to have a stable living situation, being able to form a relationship and have a family. It's pretty crazy that we're sacrificing all this for the sake of the 'economy'. Isn't the whole point of having a strong economy is that it's meant to make us better off?

Some of us.

@ai123, have you not watched the reality series GC, following the lives of young 30 something Kiwis, where they value the fun lifestyle and freedoms to go clubbing, buy the latests fashions, and designer furniture, eat out every night if they wish with their friends? You cannot, anywhere in the world, do that and setup a home you own, with wife and kids. The overheads of a mortgage and other responsibilities are just too great. A LOT of these young folk choose to live this way and have been doing so elsewhere in the world for many years. I lived in the UK in the 1970's, married no kids, and even then the pressure and excitement to join in Carnaby Street style of living was enormous. Earlier working in Australia, single, 1969+ the contrast with conservative NZ was enormous, just no comparison. The adult pressure in NZ to be a mature, sombre, contributing community member with a house and mortgage, was stultifying. You were always being asked, "so when are you getting married and when are you expecting" was horrifyingly excruciating. i couldn't leave the country for more liberal values quick enough. The world population is far, far more mobile than NZer's realise and fulltime, long time, renting is the enabler of that culture and yes, freedom.

Wilful renters are spoilt for choices:

How about a property worth a $400 increase in weekly rent than the previous term

Maybe a house with no kitchen for $450 a week

A travelling home (bus)

Things that sound like Facebook memes are day-to-day realities for renters in NZ!

There's so much destructive thinking and wrong statements in this article that will keep you poor for the rest of your life… If anyone is reading this article and is feeling 50/50 over renting vs owning, please do yourself a favour and completely ignore this article (I grew up my in an apartment my parents rented)

I agree with you 100%, but nevertheless there are those that wish to rent and that is their personal decision. I have a couple as tenants who have said they wish to rent the house forever. They explicitly choose to rent in a location they could not afford, preferring to spend their money on lifestyle. No kids. I couldn't do it, but they are very happy, perfect tenants.

Te Kooti
You have the landlord’s dream tenants. Happy to rent indefinitely, cover your costs and pay your mortgage off while you take all the capital gains.
Oh and yes; an accountant will tell any landlord to budget 48 weeks a year occupancy so you are on a winner with four extra weeks rent a year.

Oh don't worry, I have had a few shockers....

Te Kooti
. . . and if the Government has its way with their proposed legislation you will have them for life too. :)

Yes and that's such dumb legislation. Try telling the neighbours there is nothing you can do about the parties and noise, the drug-dealing etc. Landlords will generally look after the interests of good tenants.

I had four neighbours report my tenants for noise - none of those neighbours was the least unreasonable. Fortunately my property agents were able to persuade them to move on. This was about 3 years ago - I still own the property but it has family in it and if my daughter and her kids move on then it will be for sale. Bad tenants are a serious pain for a landlord - and that is befoe current legislation.

I see a gap in the market opening for some really large, persuasive "property agents"

Reading the comments above there is a lot of frustration at the lack of available properties and the competition to rent poorly presented homes. I made the point the other day that council has to ease up on rigorously vetting resource consents to the point of making it impossible to get planning approvals. We went to see a planning consultant where we have a property that is zoned and technically allowed roughly 20 units subject to discretionary RC. But guess what the planner will have to build a case and even then it is as possible as not the council will not agree. The planner talks about "risk" in the planning process. Wtf other permitted uses are not viable I have already been through it. This is good quality warm and dry rentals for longterm tenants with shopping close by thatvsatisfies a need. So we have money to invest in housing and dont want to have to pour tens of thousands or even more down a hole with high consultant fees and lengthy delays. I want to get something done before I die lol ... please council. And by the way I know I am nuts for wanting to go anywhere near residential rentals but I expect the govt will back off the worst of the proposals

It would have been more accurate to describe people as non-buyers by choice. Some people that can afford even now to buy a house they just consider that is just not worth half the asking prices so why bother throwing away your money when you can keep renting and maybe save for when prices become more sensible.

Things change a lot if/once you have kids.

Interesting article that mislabels"choice", but it also provides and interesting insight into the mindset of some of the younger set today. I find it odd that they think owning a home is a blockage to being mobile when looking for a job. Yes it may be a base in a place where there is no job (in the moment, or no better job) but it only holds you back if you let it. i know of people who have moved centres to a new job that promised the world, but turned into anything but, and within weeks they'd left the job and returned home, to a "lesser" job. Also note that even then as now the cost of mortgage etc was still less than any rent they paid. A job loss impact o mortgage payments can be covered by income insurance, so owning a home is much less the burden that many think it is in some respects.

I find it odd that they think owning a home is a blockage to being mobile when looking for a job.

I'd say the vast majority would love a home to settle in. I'd imagine 95% of them are precluded from this due to economic conditions and are just trying to adapt to the reality of this.

(Personal insult removed. Please see our commenting policy - https://www.interest.co.nz/news/65027/here-are-results-our-commenting-po...)

Nobody rents by choice, you rent because you don't have the option of purchasing. This can either be straight out financial or your setting your sights to high on the property ladder. As soon as your earning enough money you buy regardless, even if your still renting yourself because you have a transient lifestyle due to work BUT you rent your house out. Shamubel Equub was the guy that finally admitted he got it wrong and bought a house. More people could buy if they were prepared to make sacrifices in other areas of their lives ,if your not then keep renting but don't complain about it as its your choice. Renting is also becoming like a bit of a religion with people preaching it and justifying it to others but its not a religion its a cult and not one you want to be in still when you get to 65.

I could've bought 7 years ago, but instead I started a business. If I sold the business now I could buy a nice place mortgage free. But I'm not doing that, the business pays me well, I answer to no one, have no debt and I willingly rent in central Auckland for 700 a week. We are out there for all sorts of reasons.

As a long term landlord / property investor / property manager I love the article. All good points.
As the lovely quality tenants say they want to be long term good tenants. They however they all seem to want to be able to move at a moments notice but at the same time want to stay in a lovely home for as long as they want.
I personally am happy with this so long as they stay at least one year. I used to put on my tenancy agreements that if the tenants leave in less than one year they had to pay a letting fee of one weeks rent. Almost everyone thought this was a good fair thing to do. But the government stopped it.
Many of the good things about renting are being destroyed by the current and previous Governments.
Not all tenants and not all landlords are bad. Why not leave us alone Mr Government. We all want to live our lives in a fair decent world without your intervention.

The truth is before I owned a house I mentioned similar things about “not wanting to be shackled down” to a mortgage. “What if I wanted to suddenly shift”? But now after owning homes I think “if you want to shift, just sell it or rent it out” it seems like such a huuuge deal when you buy your first house. But after a while you realise it’s not as bigger deal as you once thought.