Locally, on Auckland’s North Shore, I am seeing an increase in houses owned by older people that are not being maintained. As a result their properties are deteriorating. The average pensioner in their seventies, who has inadequate savings and doesn’t have an investment property, is really hurting. They don’t have any spare money in the kitty to undertake basic maintenance on their house every year. They’ve also been impacted by the shortage of handymen and of builders and tradies in general. Tradies’ hourly rates and the cost of construction materials have also increased massively.
These baby boomers who are struggling don’t want to be forced to sell up and leave their city, their community, their families and friends. But increasingly, this may well be the most obvious option. Another is to sell their home and radically downsize. A third option is to forget about leaving an inheritance for their kids and take out a reverse mortgage. This would mean borrowing against the equity in the home and in the process creating an income to supplement their pension and give them choices and a modest lifestyle. Wouldn’t the kids rather see their parents having some independence and quality of life in their retirement?
A number of pensioners lost their retirement savings in the GFC in 2008. Today around 70-75% per cent of pensioners rely solely on the pension as a means of income. Those looking to remain in work are often penalised by the ageist attitudes of employers and recruitment agencies.
Has NZ Superannuation kept up with the cost of living? Is it adequate to support a no-frills lifestyle for those who rely solely or mostly on their pensions to get by? In a city like Auckland the pension is definitely not enough on its own for people to retire on.
It’s easy to see why. Rates in Auckland have increased every year. The cost of basic insurance has gone through the roof post-Christchurch earthquake. Household utility bills have also increased, as have food costs.
Pensioners whose life savings are in the bank, rather than in managed funds or invested in a property, are also not getting a good return on their deposits.
I’m also regularly encountering pensioners who are being faced with unexpected $250-300,000-plus bills for recladding their leaky homes or apartments, as well as the cost of renting for 10 months or more while their homes are being repaired. Those with limited savings to supplement their pensions are struggling to find this amount of money for this purpose and are suffering extreme stress. Their futures are being severely compromised if they are forced into mortgagee sales. Again, no help from the council or the government. I find it extraordinary that as two key guilty parties in the leaky building fiasco, the council and the government continue to benefit from leaky home owners’ misery. With each reclad the council charges like a wounded bull for its building fees and the government pockets the GST portion of the reclad costs. Can you believe it?
I want to end by highly recommending a book – Rotten to the Core: The Inside Story of New Zealand’s Looming Leaky Home Catastrophe, recently released by Dana Publishing and written by Dennis Neilson and David Buckleigh. The book is the result of extensive research carried out by Dana. It reveals the inside story of New Zealand’s leaky home scandal and identifies what caused most of the damage. The book clearly shows that the leaky home crisis was preventable and it provides evidence that successive New Zealand governments ignored the advice of timber experts and scientists. They allowed themselves to be influenced by corporates with vested interests into taking action and passing legislation that proved to have dire consequences. The book identifies the culprits and exposes the vast cost, both emotional and financial, incurred by thousands of devastated New Zealand homeowners, who have been sold down the line. I finished reading the book feeling sickened and outraged.
I foresee that this book will become the ‘Bible’ for lawyers fighting class action suits on behalf of multitudes of angry and betrayed leaky home owners.
Rotten to the Core is available from: https://www.dana.co.nz