The “New Zealand Dream” is Still Alive


The promotion of middle-income home ownership long has been a policy priority of governments around the world. This includes New Zealand, as Gael Ferguson indicated in The New Zealand Dream, published in 1994:

"From the late nineteenth century when New Zealand governments first provided cheap and easily accessible loan finance for houses, state support for housing became an intrinsic part of New Zealand life. In fact we could go so far as to say that government support for "The New Zealand dream" -- the family home in the suburb -- has profoundly influenced the shape of New Zealand society and the New Zealand landscape.”

Discouraging the New Zealand Dream

But, before the ink was dry on Ferguson’s book , as in metropolitan areas in other countries, the active discouragement of “the family home in the suburb” began to dominate public policy in New Zealand before the ink was dry on Ferguson’s book. Planning authorities imposed urban growth boundaries and other measures favoring high density and apartment living, with the predictable consequence of ballooning land prices. This led to severely unaffordable housing in the largest urban areas of New Zealand. In Auckland, the median multiple tripled, with house prices reaching a severely unaffordable nine times household incomes in 2018, according to the Demographia International Housing Affordability Survey.

Resilience of the New Zealand Dream

This has led to a housing affordability crisis that has been a principal issue in (at least) the last two national elections. Moreover, New Zealanders have retained their Kiwi Dream, as three developments indicate.

First, there has been a large increase in “lifestyle blocks,” which, according to Statistics New Zealand allows “people to enjoy a rural setting while still working in an urban area.” Typically these properties have single-family houses on small rural, but not agriculturally commercial properties. By 2012, lifestyle blocks had consumed more than 870,000 hectares in New Zealand, (2,150,000 acres or 3,350 square miles) more than three times the 227,000 hectares (560,000 acres or 875 square miles) occupied urban areas, according to Statistics New Zealand. Thus, while land use plans have driven up the cost of the New Zealand Dream within urban areas, many households have pursued their Dream in single-family houses on far larger lots in the countryside.

Second, in late 2017, New Zealanders elected a Labour Party led coalition government that promised to improve housing affordability. The government promised to abolish the urban growth boundaries, that so often accompany severely unaffordable housing around the world.

The New Westpac NZ Housing Preferences Survey

More recently, a Westpac NZ (the nation’s third largest bank rated by assets) public opinion survey on housing preferences reported that the “Kiwi Dream” is still strong.

The vast majority of New Zealanders still dream of owning a home with a backyard, according to new research into Kiwis housing preferences commissioned by Westpac NZ. The vast majority of New Zealanders still dream of owning a home with a backyard, according to new research into Kiwi’s housing preferences commissioned by Westpac NZ.

According to Westpac NZ Housing Lead, Robert Hill:

“Owning a home with a nice backyard has traditionally been central to the Kiwi dream, and the recent rise in house prices and increase in apartments doesn’t seem to have dented that.”

Among the respondents, nearly one-half (49 percent) considered a back yard “essential,” while another 42 percent rated the back yard as “nice to have.” Only nine percent considered a back yard to be “not important.” Among first home buyers, there was an even greater larger 55 percent considered a back yard as “essential.”

A house with a yard is even more important that one close to work. Only 18 percent of respondents considered proximity to work to be “essential,” well below the 49 percent wanting a backyard. While nine percent of respondents considered a backyard to be “not important,” nearly four times as many said that proximity to work was “not important” (33 percent).

House location also scored much lower in proximity to schools or child care, which was considered “essential” by 22 percent of respondents and parks/recreational facilities, “essential” to 21 percent. Only 11 percent considered living in social hubs (with “eateries and bars”) to be “essential.”

Finally, access to mass transit was considered “essential” by only 28 percent of respondents and “not important” to 26 percent. This contrasts with the 65 percent who considered a “lock-up” garage “essential” and only four percent who considered it “not important.”

These results are not surprising for a high income nation. The modest scores by New Zealanders for proximity to work, schools and child care, parks/recreational facilities and social hubs does not mean that they shun such places or don’t appreciate their virtues. It is rather an indication of the superior access provided throughout the nation’s urban areas by its largely automobile based transport.

The New Zealand Dream and The Universal Dream

New Zealanders reflect preferences that are found in many nations. Indeed, in an early 1990s publication, United States Secretary of Housing and Urban Development Jack Kemp referred to home ownership as a “universal dream.” Regrettably, the New Zealand Dream, like the Great Australian Dream, the Canadian Dream and the American Dream, at least in some metropolitan areas, are all slipping out of reach for most not who do not already own their own homes. What is hopeful is that at least one country ---New Zealand --- appears to be taking steps to keep its dream alive.

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed by Mayor Tom Bradley to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. Speaker of the House of Representatives appointed him to the Amtrak Reform Council. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

Photograph: Suburban housing in Dunedin (South Island), By Dushan Jugum - Own work, via Wikimedia Commons CC BY-SA 4.0