After divorce: never back on the housing ladder


In March 2018, homeownership was at its lowest in almost 70 years. Since then the median price has almost doubled and rent is up by a quarter.

It was a year after her divorce that Sue Boyce says she realised she would never own another home.

She was 51, had five children to care for including two foster children and wasn’t able to get enough equity out of the family’s farm when it was sold to get back on the ladder.

“I didn’t have much savings, I didn’t really have much of an income at all.

“It was life renting, really, and that’s what I thought my future would be, which was pretty tough.”

Boyce said she was lucky – a massage therapy course she had taken towards the end of her marriage proved the key to starting her own business. Even then close to half of her income went straight on rent, and she would consider herself lucky if she could save $50 per week.

Now 59, Boyce said she imagined many women stayed in unhappy marriages out of fear of how they would survive outside it.

Boyce is part of a growing number of divorcees who struggle to get back on the ladder.

Research suggests majority of older renters were once homeowners

Divorcees trying to buy homes are an understudied group in New Zealand but research suggests the majority of older renters owned at some point, and divorce and separation were among the leading causes for people falling out of homeownership.

A 2017 Building Research Association of New Zealand (BRANZ) report by Karen Witten found among a random sampling of tenants in four cities, 70 per cent of renters aged 55 and over were former homeowners.

Australian research found half of renters aged 50 and over had been homeowners at some point. In New Zealand, interviews with 108 seniors in rentals aged 55 years or older found 61 per cent had moved from ownership to renting.

According to the research paper Pathways to Renting among Older Former Homeowners, produced by Building Better Homes, Towns and Cities and due for release in late March, the most common reasons for loss of homeownership was relationship breakdown, followed by financial hardship.

Of the 66 former home-owning tenants interviewed for the paper, 67 per cent were either widowed, separated or divorced. Divorce or separation was the primary reason for leaving owner-occupation for seventeen people, while eighteen seniors reported that financial crisis or shock triggered leaving owner-occupation.

The paper notes following divorce or separation, some respondents had not been able to liquidate their housing equity, while for others their share of sale proceeds was insufficient to buy another dwelling. Continue reading

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