A 20 per cent deposit on the average-priced Kiwi house is around NZ$200,000 – not an easy amount to save up.

First-home buyers who live at home with their parents have a major advantage, because their reduced living costs help them save faster.

This new trend of adult children sharing a home with midlife parents is a challenge for both generations, but with a shared goal of home ownership for the children, compromises can be found.

“It’s really hard to imagine how anyone could come up with a deposit when they’re still paying rent,” says Conal*, 34, an electrician.

Conal and his fiancée Nina live with his parents in the family home in Auckland.

His two older siblings have already moved out and bought houses with their own partners, and he and Nina are hoping to do the same.

They’ve been looking at houses for about five years, and in hindsight Conal wishes they’d bought at the first opportunity – but each time they’ve come close, something hasn’t been right.

Happily, it’s been five years of relatively stress-free cohabitation with Conal’s parents, even if they’re all hoping the young people get a step onto the housing ladder soon.

“Obviously we’d rather have our own place,” says Conal, “and obviously Mum and Dad would rather we had our own place too. But they’ve been great.

“They know there’s no way we can save as fast as prices go up, and then pay another $700 a week in rent on top of that.

“Nina and I pay $300 a week and that covers a lot of our food, too, so it’s a great deal for us.”

Extended family living on the rise

Overall, New Zealand’s household size is diminishing. The average number of people in a household has dropped from a high of 5.2 (in 1886) to the current low of 2.7, unchanged since 2006.

But that static average hides two big trends: a rise in both smaller, one-person households, and a rise in multi-generational living.

They offset each other; the rise in the number of single-person households often makes the headlines, when a lot more people live in extended family households than in single-person ones.

In total, the number of multi-generational households has risen 30 per cent between 2006 and 2018, according to Census data:

A 2015 University of Auckland research paper on multi-generational households found both financial necessity and economic strategies were among the major reasons for living with family – and financial benefits were the number one advantage of the situation.

Other advantages included shared care of children or older people, shared housework and strong family relationships.

On the downside were issues like privacy, a lack of freedom and constant disruptions.

Noise and visitors can be an issue, along with interference, particularly with child-rearing.

Conal says that his living situation is made easier because there’s plenty of room in the house for all four adults, although admits he doesn’t often invite friends to his parents’ home, instead catching up at cafes or at their homes.

Homes for multi-generational living

Extended families who want to cohabit can overcome the problems of privacy and space with a house specifically designed for multi-generational living.

This might include a minor dwelling, or a ‘home within a home’ with dual access and separate kitchens.

Ten years ago, Generation Homes didn’t have any plans specifically for this type of buyer, says chief executive Kevin Atkinson. Now, though, there’s a whole plan book for extended family living.

“This type of living is on the rise, because it has to be,” he says.

“It’s a reflection of Western society catching up with other societies – but it’s mainly being driven by economics.”

He says it’s not only a short-term solution where young people move home to save for a deposit.

It’s also a permanent way for families to pool their buying power to produce a better living situation for everyone, and an appealing alternative to retirement village living for an older generation.

“The numbers really stack up. Recently we had the grandparents spend $600,000, then their children put in another $700,000 to build a home where three generations lived together,” says Atkinson.

“Otherwise, the grandparents would have spent $700,000 on a right-to-occupy home in a retirement village, and the parents would have needed another $1 million for their own home.

“This way everybody has a lower mortgage, the grandparents have security of tenure, and they can share the rates bill.”

Benefits outweigh the risks

Atkinson says, with space for everyone and the legal agreements around extended family living now well established, a lot of the risk has been taken out of co-ownership.

No, there’s no way to remove the relationship risks of interfering parents, ungrateful children or nosy grandparents, but the strong financial upsides mean that this way of living is likely to keep increasing in popularity.

It’s certainly been a good strategy for Conal, who admits that living with his parents has been, if anything, perhaps too enjoyable – if they hadn’t all got along so well, he and Nina might have moved out by now.

But he’s optimistic that this is his year.

“We’ve saved up about $120,000, plus we have about $95,000 between us in KiwiSaver.

“That sounds like a lot, but it doesn’t really go that far in Auckland. At least there seems to be a lot of investors out of the market now, so maybe 2022 will be the year it finally happens.

“I hope so, anyway.”

*Names withheld.