Breakfast interview with Peter Cordtz on declining home ownership
Breakfast interview with Peter Cordtz on declining home ownership
Declining home ownership highlighted in a university study released this week is a key focus of CFFC's three-yearly Review of Retirement Income Policies, says Acting Retirement Commissioner Peter Cordtz.
The study by Otago University's Department of Accountancy and Finance found that non-homeowners were in a worse position financially at retirement. It said the government needed address the lack of suitable public housing, rising housing and rental prices, and mandate compulsory contributory retirement savings plans.
Cordtz says CFFC is looking at declining home ownership and KiwiSaver as a retirement savings plan as part of the 2019 Review.
"In the 2016 Review we found that 40,000 superannuitants were also receiving an accommodation supplement to meet housing costs, which was an increase of 15% on 2013," says Cordtz. "We expect to see that figure continuing to increase. Even though Superannuation costs New Zealand $30 million a day, at $411 per week it assumes Kiwis have housing covered by the time they reach retirement. We know that's not the case for everyone."
Home ownership was a critical factor in people arriving at retirement in good financial health, and different models could meet the needs of different communities. For example, CFFC was working with iwi and government departments such as Te Puni Kōkiri to increase Māori home ownership through shared equity programmes.
Accumulating savings through investments such as KiwiSaver was also key to a financially healthy retirement. CFFC will study the impact on KiwiSaver of declining home ownership, the nature of work through increasing self-employment and contract work, and the increasing number of people working past 65. It has also been asked to look at New Zealanders' understanding and perception of KiwiSaver fees, and ethical investments.
"Individuals need to decide what their long term goals are, and what it will take to achieve them," says Cordtz. "We're working toward making recommendations to government in a range of areas that will help enable Kiwis to have the kind of retirement they want."