How To Fix YOUR Housing Affordability Crisis

Housing affordability is always a hot topic in this country, and for very good reason.

The cost of a roof over our head is a massive issue with many flow on impacts.

I started thinking about how this is solved.

We could do another study?

Naah, maybe another report?

Actually, let’s graph out the change in % over time and tell everyone how it’s changed?

Wait, wait, wait, it is 2024. Let’s just give everyone a big bold conclusion like ‘increase land supply’.

At least that one sounds like a solution.

How about this four-point plan for improving home affordability:

1. Ensuring people are in a better financial position to afford a house.

2. Freeing up the supply of land.

3. Dealing with the compliance issues that drive up building costs.

4. Allowing state house tenants to buy the houses they live in

Those 4 points sound great Luke, wow!

Well that is a copy and paste from John Key’s speech in 2007.

The year is now 2024 and new research shows almost one-in-five New Zealanders are spending more than 50% of their household income on rent or a mortgage - a report from global infrastructure firm GHD. (I never know if these reports quote before or after tax?).

What could be more disheartening is that GHD NZ chief economist David Norman said the report also found residents here had an expectation the government should help address problems in the housing market.

Bloody hell it’s nearly 2027 and 20 years on from JK's 4 point plan and people are still rolling out most of the same points as the thing to fix everything.

Alright, I get it. We all want to leave it to the government to fix.

We would like to have that expectation, but I get sick of reading about problems with no solutions.

So let’s get real for a second.

Specifically for those of you who have some control. And I acknowledge that many people don't and those people are represented by bodies & people fighting for them too - salute!

This is for those of you who have the ability to change your situation but don't realise it.

Like it or not, one of the largest costs you will face in your life is housing.

It’s strange how we do heaps of these reports & studies, but instead of educating people about how to reduce this, we just do another report/study to see how the % has changed.

Or we look at what individuals can't quickly control, like 'increasing supply of land' & sit & wait.

Maybe even worse, we may be spending 40 to 50% of our household income on housing and someone comes on the tele and tells us to cut our subscriptions and drop the lattes.

That will fix it all for us!

Accounting has been a blessing for me to get closer to people who create income. I’ve seen under the hood of a lot of successful ventures and lifestyles.

We need more of these stories told by everyday Kiwi.

These stories open up new paths/ideas/solutions for other Kiwi which in turn create hope.

Accounting has also taught me to analyse major expenses and look for alternatives.

When I quit my job, I knew there must be a way to remove my rent outgoing and therefore decease my housing expense.

Enter house sitting and calling the olds for a bed when it didn’t work.

I know, I know not everyone can do this. Good. Your journey is not mine.

So…don’t quit here.

It’s easy to complain about the cost of housing, but at least brainstorm some of your own solutions.

I recently talked with some people from Mt Maunganui who have a number of friends who rent their properties out every time the AIMS games are on in the region.

This is how you turn a liability (your house) into an asset (by making it generate income).

Tens of thousands of people come to the region and suddenly need accommodation.

Some places were getting $800 a night. Others $6,000 to $8,000 a week. I have had multiple messages around this.

Think about how likely you are to get a $800 bonus in a day? Or a $6,000 to $8,000 pay rise?

Your house is a phenomenal lever to pull in your financial situation in order to decrease your overall living costs. Even if it is just a weekend, week or long weekend per year.

Once you've done it once, you realise it can work, and then you might do it quarterly or more regularly.

Think about what that could do for you. Get creative about how it could work. MAKE it work!

Unfortunately, too many people who own a home are too unwilling to pull this lever. They don't want to MAKE it work and will have all the reasons it can't whilst others around them somehow MAKE it work. Funny that!

I have listed some further ideas of ways to decrease your weekly spend on the cost of housing.

- Refinance Your Mortgage - Shop around for better interest rates and consider refinancing your mortgage to reduce monthly payments. Lean on and advisor.

- Downsize Your Home - Consider moving to a smaller house or apartment that meets your needs. If you own, move and rent yours out?

- House As An Asset - Rent out a portion of your home, such as a room or a separate unit. Generate additional income that offsets your housing cost. Use AirBNB on long weekends. Get a non-taxable boarder, (research this). Offer short-term accommodation for business travelers, students, or temporary workers.

- House As An Asset Pt 2 - Rent out your driveway or parking space. Storage: offer unused space as storage for neighbours or local businesses.

- Negotiate Rent - If renting, negotiate with your landlord for a lower rent, especially if you have been a long-term tenant. Look for similar properties available at lower rates.

- Home Sharing - Consider sharing a home with friends or family to split rent and other costs. Get a partner?

- Move home - Back with your family for a period.

- House Sitting - Try house sitting and renting your property out?

- Relocate to More Affordable Areas - Research areas with lower housing costs. Plan around your work / commute too.

- Pay Off Your Mortgage Early - Make extra money and make extra payments towards your mortgage principal to pay off the loan faster and reduce the total interest paid over time.

Housing affordability in NZ is a real problem and I don’t see it being solved quickly, so I would encourage YOU to lean into solutions where you can.

If you can bring down the % of your income you spend on housing, you will be in a lot better position financially. You might even just have a season of your life when you do this.

Some of you are more in control of this than you realise.

Yes, maybe you shouldn’t have to, and it’s not fair etc etc, BUT it won’t be fair in a years' time when housing affordability in NZ still sucks.

Or 20 years' time when someone rolls out another 4 point plan that hasn't been actioned.

Stop and think about this:

? What would it be like if your living costs were less?

? How different would your life be?

? What WOULD YOU DO with the extra cash?

Solutions > Problems.

Brainstorm some you can have a crack at.

Solutions work when you make them.

Be bold,

Luke

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