Interpreting the Changing Meaning of the Peri-Urban Holiday House: The Complex and Paradoxical Nature of Housing Financialisation

ABSTRACT

In recent studies of housing financialisation, a “financial paradox” has been identified in which owner-occupied houses are simultaneously places of ontological security and financial investment. This paradox influences the way owner-occupiers interpret their primary and holiday houses, particularly if the latter are located in sought after high amenity locations. In this paper, we argue that, faced with rapidly increasing residential property prices, many long-term owners reluctantly reconceptualise their understanding of their holiday house as both a recreational and financial asset. Our study uses in-depth interviews with owners of holiday houses on Waiheke Island, Auckland, Aotearoa New Zealand to identify how they are interpreting and managing the normalisation of this paradox. The island is historically popular for holiday houses and is currently experiencing substantial property price increases. It is therefore an ideal place to study the complex and paradoxical nature of housing financialisation and thus potential biases in the housing market.

KEYWORDS:

• Financialisation
• neoliberalism
• ontological security
• holiday house
• home
• financial paradox

Introduction

In this paper, we take a behavioural economic approach to the everyday lived experience of housing financialisation (Lai 2018). Our particular focus is on the phenomenon of multiple dwelling (McIntyre, Williams, and McHugh 2006; Perkins and Thorns 2006) and the connection between second or holiday house ownership and processes of financialisation. In this work, we are influenced by theoretical interpretations of everyday lived social and economic behaviour found in closely allied interpretations from geography (Lai 2018; Lee 2006; Peck 2013; Smith 2008, 2015), sociology (Dupuis and Thorns 1998; Forrest 2015; Forrest and Hirayama 2014), anthropology (Besky 2016; Çalişkan 2010; Gudeman 2001, 2008; Guyer 2016), property/land economy (Levy and Lee 2004) and housing studies (Perkins and Thorns 1999, 2006, 2017). This work is often informed by the application of social qualitative research methods (Clark 1998; Guyer 2015; Levy, Murphy, and Lee 2008; Perkins, Thorns, and Winstanley 2008) and reflects the adoption in elements of each of these disciplines since the 1970s of an epistemological position which combines social constructionism with political economy. Seen from this point of view, financialisation is a process which manifests and is influential globally in a variety of spheres, but is made and remade in processes of social and cultural interaction in networked local sites and in day-to-day practices. Interpreted from this perspective, and advancing ideas about housing consumption, the house is a key location where “the economic, social and symbolic dimensions of behaviour come together” (Wilk 2001, 133). It is a place of practical usefulness and also a site in and through which identity is created and articulated (Dupuis and Thorns 1998; Perkins and Thorns 1999, 2017). This is true for primary and second houses (Paris 2009).

In Smith’s (2008, 520) economic geographic and anthropological terms, the house, the built structure of the home, is the piece of material culture that “sums up all of life: its form expresses the shape of the world”. This being the case, Smith also argues that if the house and the social relations associated with it are reconstituted, then much else will also change. Consistent with Smith’s perspective, in this paper, we rely on and advance arguments suggesting that processes of financialisation are implicated in the reconstitution of the meaning, use and experience of owner-occupied housing, including holiday houses. This is because, as proponents of the housing financialisation thesis assert, “There is an increasing disconnect between the lived experience of house ownership and its form as a financial asset – between the ‘social project’ of house ownership, which dominated much of post-war political and policy rhetoric and the neoliberal economic project” (Forrest and Hirayama 2014, 233; see also Aalbers 2016; Forrest 2015). In these terms, housing financialisation has become one of the most pressing issues of our time (Farha 2017).

As a way of illustrating these changes, we report a study of an element of the Auckland, Aotearoa New Zealand, housing market as it has been influenced by financialisation, specifically the peri-urban holiday house market on Waiheke Island, a place where the city meets and interconnects with the coastal countryside. Our research focus is on how financialisation is playing out and being constructed in people’s everyday lives, and our overall research question is: what does housing financialisation look like in the everyday? Consistent with Forrest & Hirayama’s (2014) argument, above, answering this question involves interpreting financialisation as a product of neoliberalism: an ideology of governance and a force that influences people’s ways of understanding and experiencing the world (Ganti 2014, 89). Following Peck (2013, 151), such an approach calls for:

… methodological strategies that are pitched somewhere between, on the one hand, those finely granulated studies of local neoliberalisations, that are characteristically light on extra-local referents or invoke the concept only ambivalently, and on the other hand, those sweeping accounts of neoliberal hegemony that are largely abstracted from any kind of social or textual specificity and which gloss over uneven developments and contradictory hybridity.

In the remainder of the paper, we outline our literature review on financialisation, home and the holiday house, discuss the Auckland City housing market and Waiheke Island, elaborate our research sample, method and interpretative approach, and in a discussion of our interview data interpret the substance of the paradox of house as home and financial investment.

Literature Review: Financialisation, Home and the Holiday House

For Lapavitsas (2011), “financialisation,” is one of the most innovative ideas to emerge from heterodox economics and political economic analyses of the global financial crisis of 2007–9. He notes that its appeal lies in its ability to connect what happened before and during the crisis – and what is continuing to happen – with the “secular growth of finance … [and] the structural transformation of capitalist economies … with [their] … attendant social implications” (Lapavitsas 2011, 611). Lapavitsas contends that the financialisation concept is “still raw and underdeveloped, but its power is undeniable” (Lapavitsas 2011, 611). Elaborating this idea, Bear et al. (2015 unpaginated) define financialisation as referring

… to the scaling up and growing influence of finance, and specifically the increased linking, translation, and interactions between a financial mode of apprehending the world and other social domains … [and] the explicit application of particular financial market values to new domains, fracturing illusions that capitalism is separate from multiple, intersecting sites of production, such as the household.

Van der Zwan (2014) differentiates three specific forms of financialisation: first, the emergence of a new regime of accumulation: second, the ascendency of the shareholder value orientation; and third, “the financialisation of the everyday” (p.99). We note that a great part of the recent literature on housing financialisation focuses primarily on the first two of these forms. This work interprets the ways housing financialisation is variegated globally and is illustrated in multiple recent studies cited, for example, by Aalbers (2017) and Fernandez & Aalbers (2020). These studies focus on housing as a new form of financial asset held by companies aiming to increase shareholder value from their ownership of undeveloped land and in the construction, sale, renting and financing of housing and their bundling of housing assets and financial products for sale to other investors (Chen and Wu 2022; Ergüven 2020; Nethercote 2020).

It is the third expression of the process of financialisation that is our focus because it impinges on experiences and understandings of “house and home”’ and the everyday social and economic relationships and behaviour that are associated with them (Lai 2018; Pellandini-Simányi 2020). Owner-occupied houses are now increasingly financialised (Farha 2017; Wu et al. 2020) and this can disturb the sense of ontological security offered by the home. Lai (2018, 622) argues that this change is related to the formation of financial subjects created through the “frame of intimacies as family and personal relationships, emotions, and care become intimately bound up in decisions about financial commitments and investment practices”. One of the significant commitments referred to by Lai is mortgage debt and associated repayments, interpreted by García‐Lamarca and Kaika (2016), after Foucault (2003), as a biotechnology that creates a close connection and interaction between owner-occupiers and global speculative financial and real estate markets.

In an important attempt to link debates about the meaning of house and home with the interpretation of the financialisation of the everyday outlined above, Smith (2015) discusses the “financial paradox” (p. 61), suggesting that a house can be both a home, the nexus of ontological security in a person’s life (Dupuis and Thorns 1998; Saunders 1984, 1986), and a financial investment and all that this implies in terms of financial indebtedness, security and future proofing. By focusing on the financial paradox of house as home and household investment, Smith’s aim is to “bridge the divide between work on ‘home cultures’, which rarely tackles the hard and rational edges of finance, and themes in traditional housing economics which underplay the significant meanings and experiences of dwelling (King 2004) (building on Cook, Smith, and Searle 2009; Smith and Searle 2010)” (Smith 2015, 61). In part, the need to bridge this divide – and the difficulty of doing so – emerges from the need to interpret the workings of neoliberalised housing markets. Smith et al. (2006) argue that “relatively little is known about the variety of interlocking (economic and other) processes that fuel steep, rapid, and highly localised housing booms” (Smith, Munroe, and Christie 2006, 82), so their strategy has been to approach the analysis of housing markets in a different way, by turning “away from the stylised facts of housing economics and towards the ‘close dialogue’ of social anthropology (Clark 1998), in order to engage with the beliefs and practices drawn into market-making” (Smith, Munroe, and Christie 2006, 82). Smith’s body of research (see, eg Christie, Smith, and Munroe 2008; Smith 2008, 2011, 2014, 2015; Smith, Munroe, and Christie 2006) has largely interpreted the owner-occupied home, presenting it as “an arena juxtaposing the juggling of domestic life in the ‘ordinary economy’ (Lee 2006) with the globalization of finance and its attendant renegotiations of social contracts” (Smith 2015, 61).

We extend Smith’s work by incorporating consideration of the holiday house, colloquially called a bach (pronounced batch) in the north of Aotearoa New Zealand (Keen and Hall 2004; Perkins and Thorns 2006; Walters 2014; Yoffe 2000), as a way of elaborating an understanding of the financial paradox and the financialization of the everyday. The New Zealand bach finds its equivalents in holiday houses set in coastal and rural settings in many places internationally. Case studies of these various forms of holiday homes have been reported by tourism researchers, Hall and Müller (2004), outdoor recreation scholars McIntyre et al. (2006), and discussed from a housing studies perspective by Paris (2009, 2010, 2014). These holiday houses take multiple forms and have various local colloquial names, for example, shack (Western Australia), cottage (Canada), hytte (Norway), mökki (Finland), dacha (Russia) and crib (southern Aotearoa New Zealand). Holiday houses are significant sites of family leisure and related social interaction, although as Perkins and Thorns (2006) point out, all work and daily maintenance functions that are central to life in the primary house, also have to be conducted in the second house. McIntyre et al. (2006, 314) characterise the ownership and use of a primary and holiday house as “multiple dwelling”, in which people develop a sense of being “at home” in more than one place and where they “attempt to negotiate meaningful links with family, national traditions and nature in a complex world”. In Aotearoa New Zealand, as is also the case internationally (Paris 2009), historically, holiday houses were basic in form and part of a self-built, low-cost rustic outdoor recreation tradition (McIntyre and Pavlovich 2006; Perkins and Thorns 2001). This tradition continues (Figure 1a), but today, more of these baches resemble suburban residences in the countryside, with not a few built on a grand and expensive scale (Figure 1b) (Kearns and Collins 2006; McIntyre, Williams, and McHugh 2006).

Figure 1. (a) is a small bach or holiday house. An example of a traditional Waiheke Island bach.Credits: The credit for the figure is Brian Bookman.

Figure 1. (b) is a large bach or holiday house as seen from the sea. An example of the now increasingly common large Waiheke Island house.Credits: The credit for the figure is Stuff Limited.

Holiday houses are often set in high amenity environments, and it is for this reason that their proliferation and use is often discussed in the context of amenity migration (Argent, Smailes, and Griffin 2007; Argent et al. 2014; Glorioso 2000; Loeffler and Steinicke 2007; Moss 1987, 2006; Perkins, Mackay, and Espiner 2015). The term amenity migration was coined by Moss (1987, 2006) and in Glorioso’s (2000, 276–77) terms refers to the late-modern phenomenon of increasing numbers of people moving cyclically or recurrently to and from the countryside within and between nations to engage with and consume high amenity landscapes (see also Paris 2009). These landscapes are often the subject of widely circulated positive representations in a variety of media (McCarthy 2007). Argent et al. (2014), writing from an Australian perspective, argue that one of the predictors of landscape attractiveness is easy accessibility to urban areas, emphasising the important position of peri-urban landscapes for recurrent amenity and permanent migrants. Amenity migration adds an extra dimension to processes of counter-urbanisation beyond the near-fringes of the city (Paris 2009). As a result, in Aotearoa New Zealand these areas are being reconfigured demographically. In this process accessible peri-urban “amenity-rich rural areas – including those on the coast – are being subject to in-migration of relatively affluent, professional and service employees from nearby urban areas. This migration results in a complex mix of long-term residents, seasonal-homeowners and new migrants” in the areas concerned (McIntyre and Pavlovich 2006, 244). The perception of high amenity associated in-migration and residential and other real estate development, manifests in escalating property values in the peri-urban zone (McIntyre and Pavlovich 2006).

When holiday houses are located in these accessible high amenity peri-urban places, and where property prices have risen significantly, often to a level not expected at the time of purchase, the “financial paradox” is thrown into stark relief. Situations such as this offer an opportunity to examine the normalisation of the paradox and the temporal working out of financialisation as interpreted, experienced and managed by homeowners. Because the holiday home is an “extra” in people’s lives, representing discretionary spending, it will feature to varying degrees in their strategies for risk management and the alleviation of financial pressure, should it be necessary, in a way that the primary home doesn’t, except under dire conditions. Owners are therefore more likely to be explicit about the degree to which their holiday house is a home and an investment, and indicate also the influences on, and types of logic associated with, housing decision-making, including financing.

The Auckland City Housing Market and Waiheke Island

The holiday houses that are owned by our research participants are located on Waiheke Island in the Hauraki Gulf, 17.7 km from the metropolitan area of Auckland (Figure 2), the largest city in New Zealand with just over 1.5 million of the county’s total population of 5 million. Waiheke, with a resident population of approximately 9,000, swelling to over 30,000 in summer, is a 35-min ferry ride from Auckland’s downtown. Until recently, Waiheke was considered far enough away to be outside of Auckland and therefore a logical holiday destination, but the island today is more appropriately thought of as both a place of recreation and one of Auckland’s suburbs (Tait 2014). This is because of the inclusion of Waiheke in the Auckland super city Regional Council amalgamation that happened in 2010, as well as the increasing frequency of passenger and car ferry sailings between the island and Auckland. Housing on Waiheke Island is now very much part of the Auckland market.

Figure 2. Auckland, the Hauraki Gulf and Waiheke Island.Credits: The credit for the figure is Tim Nolan, Blackant Mapping Solutions.

Auckland and its housing market have the dubious distinction of being ranked as the fourth most expensive in the world relative to income (Cox and Pavletich 2017, 14 & 24), behind only Hong Kong, Sydney, and Vancouver. Through 2015 and 2016 (our primary fieldwork was conducted in mid to late 2016), prices were rising on average 25% a year across the city. After our primary fieldwork, and during the writing of this paper, we continued to follow Auckland and Waiheke house price trends and test the veracity of our argument by having Waiheke house owners other than those in our original sample (n = 6) read and comment on our interpretation. During the intervening years our secondary research found that while the rate of price rises has fallen back, house prices on Waiheke today are significantly more expensive than they were a decade ago. This was of key importance because two-thirds of our participants had purchased their houses before the boom so they had been able to buy, with their middle-class incomes, what were considered inexpensive holiday houses. While Cox and Pavletich (2017) report on the ratio of income to cost of housing, what they don’t do is elucidate the myriad influences on the ways people such as our participants think about and engage with residential property, including holiday houses, which is central to financialisation. The emphasis on value as price has strengthened considerably, fuelled by multiple sources of data, myriad perspectives, and political dynamics that are affecting people who own or want to own houses in Auckland. These include the normalisation of debt, the operation of financiers, modes of government regulation, including an unwillingness to initiate a capital gains tax on most housing, and the unrelenting scrutiny of house price activity in the media and in real estate consultants’ advertising designed to increase their sales opportunities (Perkins, Thorns, and Newton 2008).

Added to this is the enduring cultural trope of the “Kiwi Dream” (Kiwi here referring to the colloquial name, of Māori origin, for New Zealanders) as represented in the widespread and deeply entrenched desire to own a house (Ferguson 1994). This is a reference point for New Zealanders and their perception of who they are and what constitutes success and prosperity. For those who can afford one, holiday house ownership has been elevated to a very significant marker of an individual’s and/or a family’s measurable level of wealth. Eaqub contends that “At the heart [of the superheated housing market] is a culture of home ownership and housing investment” (Eaqub 2014, 27). This affects how people conceptualize house and home and engage with financialisation.

Author Positionality, Research Sample, Method and Interpretative Approach

A very brief comment about the authors’ positionality is in order. The research topic was of particular relevance to the research team because, while all of the authors have backgrounds in various elements of house and home research, including the study of recreation, tourism and the holiday house, one of us has also owned a holiday house on Waiheke Island for 12 years and has therefore lived elements of the experience we discuss in this paper. This had afforded us additional insight into the phenomenon under study since the completion of the first round of fieldwork.

Ethics approval to interview our participants was attained from the University of Auckland Human Ethics Committee (# 17388). Of our 18 participants (nine couples), who are identified using pseudonyms, all but two have primary residences in Auckland. The exceptions are a couple who live in a smaller provincial town, some 4 hours southeast of Auckland, and another individual who has relocated to Waiheke because he now works on the island, and his partner lives in Auckland. They all identify as middle-class, and most have owned their holiday house for between 5–20 years, with one couple owning for 50 years, meaning they all bought before the current housing price boom in Auckland began to gather serious momentum. Most are mortgage free on their primary residences, and at least half are debt free on their holiday homes on Waiheke.

Several of the couples are affluent, but for the most part, our participants are middle-income people, who have adult children, and who are approaching retirement within the next 5–10 years. The exception to this pattern is one couple who is mid-career and have a young family with children under 10 years of age. This couple is the most recent purchaser of property on Waiheke in our sample, having owned for less than a year. All of our participants have been employed consistently throughout their lives together, have bought and sold previous houses and have opted to buy property on Waiheke because of its proximity to Auckland and its high amenity landscapes, and/or the previous affordability of the island's real estate. All express to varying degrees how “lucky” they feel about owning a house or apartment where they live during the week, and their house on Waiheke where most try and get away to on a regular basis.

We used an interpretative semi-structured qualitative interview approach to our data gathering. Our focus was on the relationships our participants had with their baches which included the structures of finance that our participants assembled to allow them to purchase and own their holiday houses. In taking this path, we explicitly omitted interview questions that asked specifically about the monetary price of their property – even though the focus on this version of value and the rises in housing prices were being constantly scrutinized by media and commonly talked about. But as our interviews proceeded, information about our participants’ mortgage structures, their broader financial organization, the price they paid for their holiday house, and the current estimated price was volunteered to us. This allowed us to interrogate the composition of price (Besky 2016; Çalişkan 2010; Guyer 2009, 2015, 2016) – a construct that, like the ontological security of home, is interpretatively cast in the broader context of “the long-standing, national preoccupation with land and home ownership and its economic, ideological and political importance in New Zealand’s development” (Dupuis and Thorns 1998, 26). By doing this, we could derive a sense of the meanings and discourses that permeate the lives of ordinary people when they describe how they think and feel about their holiday houses, and the ways they use them.

Our interview material chronicles narratives from our participants that are essentially portrayals of financialisation. In the case of holiday houses, these narratives are multifaceted and operate on a variety of scales: they include the space of the physical house allocated to family time and relaxation, and the financial arrangements used to manage mortgages that have or are currently paying for the purchase of the bach. The narratives we encountered include: the history of financial highs and lows through individual and couples’ lives that have culminated in their purchase of their bach; expressed values about family and nurture, private space and security, and rest and recreation; and the process of affect that has coloured the participants’ reactions to the multiscale, complex assemblage of the Auckland housing market.

The Substance of the Paradox of House as Home and Investment

The Meaning of the Holiday House

Our research participants enjoyed talking about the interconnections between their primary and holiday houses. When we asked them “What is this house to you?”, often sitting on the sunny deck of their Waiheke Island holiday house, or inside their bach looking out on a sea view and sometimes glimpses of Auckland in the distance, they all said that their houses on the island were contiguous with their weekday homes on the mainland in one way or another. Kathryn said:

Well, it causes a lot of trouble because this is our home and … our house on the other side [in Auckland] is our home, so when we are talking about home, people never know what we are talking about. And neither do we half the time. But I feel this is home but when I get over the other side, I feel that’s home, but I’m busting to get back here.

On a tour through her bach, Kathryn pointed to the fittings in the bathroom which were the same as those she and her husband had previously installed in their house in Auckland. She said that these fittings made her feel like this house was a continuation of their one in Auckland. She and her husband use the bach most weekends. They leave their Auckland house on Friday morning, go to their respective workplaces, and make their way to the Auckland downtown ferry terminal by the end of the workday on a Friday, often making the 4 pm ferry. They stay the weekend, “and by Saturday morning I feel like I’ve been here a full day already, whereas on the other side, by Saturday morning, I would be feeling shattered thinking “oh god, I’ve got to clean up the house and do that sort of thing.” They then leave the island on the 6.30 am ferry the following Monday morning, and even after 18 months of ownership, she said “every weekend feels like a three-day weekend, still”.

Kathryn discussed how she and her husband had come to the decision to buy their house on Waiheke, a place that was for her, a sanctuary. She said that they had paid off their mortgage on their primary residence in suburban Auckland, and that she was watching money accumulate in their bank account each week as they worked full time in their respective jobs. Kathryn is a school teacher and she felt at the time (some two years before our interview) that there was a mundanity creeping into her work life. She said:

I work long hours. I do love what I do but at times I think well, “what’s the point? You know, if I die tomorrow there’s all this money stacking up there” … And I was starting to think about, “oh I’m not gonna work, I’m gonna cut down to part-time” … And there was something that day [which she was spending with her cousin Nathan], I can clearly remember sitting on the beach on Waiheke and thinking well you know, Nathan says we can do it maybe, maybe this actually is a reality.

Nathan, who lives overseas and works internationally in the finance field, declared that there was no better place than the beaches and environs of Waiheke, and that financially, Kathryn and her husband could manage another mortgage to buy a house on the island, despite an initial reluctance to take on a new loan. This resonated with her and her husband’s long-nurtured affinity for Waiheke, and the fact that they were thinking and looking at houses half-heartedly meant that when she saw the house that they eventually bought, along with the familiar bathroom fittings, they went unconditional on the offer within a day. She said that they will be mortgage free on their holiday house in approximately 5 years.

What was striking in Kathryn’s story was that she and her husband were prepared to mortgage themselves to find sanctuary, thus committing two debt-averse individuals to a significant financial outlay. The rest and recreation needed as respite from working, and the materialization in the form of a holiday house of the notion “life is too short to just work hard,” became the reason why they continued to work hard. Their commitment to debt eradication was all consuming, as it had been for the repayment of their mortgage on their primary home.

Home, Family, Leisure and Employment

In common with the holiday home literature, the idea that the bach on Waiheke was a dedicated family space was a recurring theme in the interviews. Kathryn and her husband’s children all lived away from home, but the house on Waiheke was where the family gathered to spend time together. Kathryn mentioned several times how important this was. Another couple, who had a beachfront property on the island, said that two of their three children lived overseas, and that they had insisted that their parents were never to sell the house on the island because it was home for them. The parents laughed about this, declaring that the draw of the house, especially the proximity to the sea, was what brought their children home back to New Zealand, so it was the only way to keep seeing their children regularly. This couple had bought their house in the 1990s. Originally from South Africa, the husband of the couple talked us through how they came to decide to buy a holiday house, evoking his acquired understanding of the “Kiwi Dream” and what it meant to them to become new New Zealanders. He said “ … we were aware of what well-heeled New Zealanders did … what New Zealanders did that was traditional at least … so we thought, why don’t we look at a holiday place by the sea”. This couple had sold up their large family home in Auckland and bought an apartment in the city so that they could get to the island more easily.

While having a bach was primarily for leisure, family and other social connections, employment commitments did intrude and while some owners were quite happy about this, others were more resistant. Our understanding of this arose particularly with respect to the installation of internet broadband to enable Wi-Fi computer connection. Many of the participants were thinking of getting an internet connection, others had already had it installed, but for at least half of the participants, the commitment to paying out another $80 a month for internet access on Waiheke was a major consideration. This revealed how tight finances were for many of the participants. Some said that they were still holding out and were happy to use mobile phone hotspots to answer emails and use other functions on their smartphones, others decamped to the island library in the main settlement of Oneroa, which all said had excellent free internet connection. Others were making the commitment to have internet capacity so that they could actively work at their holiday homes, often while one or the other partner of the couple commuted, particularly in the summer months.

Whether or Not to Lease the Bach: Home and/or Investment

All of our participants declared that they had not bought their houses on Waiheke primarily as investment properties. But many of the couples who had recently purchased their holiday houses talked about how the burgeoning capacity to let their properties to other holiday makers for weekends or longer short-term periods was very much a part of their orientating perspective when they purchased. All the couples who had purchased in the 5 years prior to interview interpreted this capacity as a “backup plan”, a go-to strategy for financial pressure alleviation should this be necessary. This was made a viable reality via the prominence and general acceptability of internet platforms such as Bookabach or Airbnb. These participants all said something along the lines of “oh we thought that we could always rent it out if the mortgage payments got too much.” Many used this as leverage in their negotiations with banks when they set up their mortgages – but also for their own peace of mind, as a way to cope with the reality of the pressure of the mortgage. Most found that they did not need to resort to letting their property at the time we were doing the interviews. One couple said:

Absolutely 100 per cent we are not renting it out. Because it’s become home, we don’t rent out the other side [in Auckland] either … it’s not [just] a holiday house, it’s home and I don’t want anyone in it. … Since we’ve been here a year and a half there’s only been four weekends that we have not been here so that’s only been four times that other people could have used it.

Notably, in contrast to the discussion above, only one of the couples in our sample had let their house. These study participants had realized when they were building their bach some 11 years before our interview with them, that the sloping aspect of the section they had bought leant itself to the building of an upstairs dwelling and a self-contained downstairs studio. This couple has used various short-term renting internet platforms since the house was built. So often have they let the top part of their house, they were proud to report, that their house has featured on the first page of Bookabach for rentals in Waiheke Island’s Palm Beach. They said “Bookabach is great for us … [For the] last two years we have had more bookings than ever before.” The couple spent most weekends on Waiheke. They too had an apartment in the city near a train station to make it easy to train to the ferry terminal in downtown Auckland. For this couple, the apartment in the city was home, but they called their Waiheke house their “future home” because they were planning to move to the island when they retired. Pamela said, “Monday to Thursday we’re in the apartment because we are working, but on Friday we tend to head over [to Waiheke] … in the summer almost every weekend, … in the winter a little less, every two or three weekends out of the month I guess”.

For this couple, their Waiheke place was “home” in the sense of being the physical place where their geographically distributed grown up children could reassemble with them as well. If the top part of the house was let for the weekend, they would stay in the studio underneath. We asked if they minded having people there while they were downstairs, they replied “No, we have got used to it … our number one priority is to enjoy the place, but number two is to cover costs.” The husband of this couple had experienced periods of unemployment after redundancy several times so they were careful to cover their financial bases. While they did not build the Waiheke house primarily as an investment, and the rental income was not counted on, they were acutely aware of how much their properties were growing in net worth: the husband said that keeping track of this was a hobby of his.

Others who had bought their Waiheke properties before the recent Auckland housing market boom, and for whom housing debts had diminished, had not considered letting their properties. The couple who had inherited their house had a bad experience with renters around 15 years ago and had decided “never again”. Most participants were happy for family and friends to use their Waiheke places on the weekends that they didn’t want to be on the island, with merely the vague expectation of a bottle of wine or two left in gratitude. But this form of generosity tended to be articulated in conjunction with a very real awareness of the value of the house. Kathryn said: “I know we’ve made a very good purchase. I’m well aware of how it has appreciated but it’s kind of irrelevant because we don’t intend selling it.” The purported value of the house was enough for many of the participants to decide that they could afford not to let it. It was this interplay between awareness of the upward movement of house prices and the holiday house as a luxurious extra that emerged as the fertile ground upon which financialisation could be understood.

An Awareness of Value as Price

As we conducted our interviews, it became apparent how aware all our study participants were of the dynamic of the Auckland housing market and the implications of value as price that this represented. This awareness was influenced by print and digital news media content, widely distributed unsolicited real estate sales commentary, and the everyday social interactions of Aucklanders in particular, and New Zealanders generally. For those who were contemplating selling their properties on Waiheke sometime in the future or who spoke about the possibilities of what could happen in their lives if they did sell, it was inevitable that their planning would have a significant financial component. Because these participants owned two or more properties in Auckland, they stood to reap a significant bounty.

David and Judi, for example, had owned their small cottage within an easy walk of Palm Beach since 2000. The house was built in the 1930s and comprised a single small living area, two very small bedrooms and a lean-to kitchen. The building was ramshackle, nothing was square, and it had been a wonderful escape-to for the couple and their now grown daughters, and was the quintessential rustic bach. This couple’s primary home was a 1905-built villa in the central city suburb of Ponsonby in Auckland, an area that has experienced some of the greatest rises in house prices through the duration of the Auckland housing market boom. David said “We’ve lived there for 34 years, in that same house. Like we don’t buy and sell … we never bought it as an investment, it was somewhere to live … but the fact that the prices have gone up like they have, well whoopy-do you know? … it has gone ridiculous”.

This couple had no mortgage on either of their properties, and David, who was older than his wife, Judi, was nearing retirement. They had worked in the Middle East for a couple of years and earned a good sum of money, “we never thought of this place as an investment, except back then [2000] we had some money and we had paid off our mortgage, and it was “well, what shall we do with this money? And buying a holiday home seemed like a good idea”. Judi, added later in the interview,

I mean we realise that it is an investment in that it is worth quite a lot of money. And it wasn’t our main reason for buying it, but obviously that’s a positive out of owning it. But then, and David always jokes about selling it. You know, you’ve said that ever since we bought it, “oh time to sell, time to sell”.

They talked about the way the “what-if-we-sold scenarios?” were especially relevant for David who enjoys tinkering with cars and felt constrained by the size of their residential lot in Ponsonby. They had thought about the possibility of selling both properties to buy a bigger rural one out of Auckland on the mainland so David could have space for more cars. Such thoughts are common among those close to retirement, but it was the awareness of the escalation of the value of their houses, and he and Judi’s articulation of the craziness and even immorality of it, coupled with their explicit understanding that this undermined the possibility of low to moderate income people being able to buy affordable housing, that encouraged them to muse about what to do in the future. David and Judi were not naive or unaware of the process of which they were a part. The contradiction of the sanctity of home and the rampant financialisation that was happening on the very ground they lived on in Auckland, and to a lesser degree in their property on Waiheke, was both visible to them and wholly part of their lives. They were critical of the neoliberal processes that gripped New Zealand society, and they counted the bounty that their timely acquisitions of their properties 34 and 16 years previously, respectively, now afforded them. The irony and dissonance were not lost upon them, but they were also aware that this was how it was now.

For those who were more recent purchasers of their baches on the island, the process through which couples had gone began with the hurdle of significant debt acquisition. They conceptualised this debt as the price of sanctuary, rest, and recreation, as part of a “social project”, the holiday home. While their narrative emphasised family life, they were confronted by a reality in which financial calculations were to the fore and these infused their lives and world view. This was particularly the case for the Osbornes, the participants with younger primary school age children. They owned a portfolio of rental properties, from which they drew their income. The husband of the couple had begun purchasing houses in Auckland when at university in the 1990s, first in partnership with his father, then as a sole operator, and more recently, as part of a married couple. This couple, consciously went through a process of separating the ontological security of their primary home and holiday home from questions of financial investment. But they were finance industry professionals, and speaking with reference to finance was second nature to them, and so their ideas about family and finance were bound up with each other, and they therefore represented a different and new type of “financialised” Waiheke bach owner.

They had purchased their holiday house approximately 8 months before our interview with them. The husband, Peter, was in his early to mid-40s and his wife some 10 years younger. When Peter talked though the process of deciding to buy a bach on Waiheke, he was very candid about how the process was conceptualised in terms of their financial capacity and how this worked in their lives. He said:

So, for her [Peter’s wife] when we did make the call [to buy the Waiheke house], she was keen to buy it. … She wrestles with missing the kids and working [and] effectively said, “Well, I’ll finance it. It comes out of my pay because I could be a stay-at-home Mum so that’s almost free money by me going off and working … .”. There’s some family cost to her working; it puts a bit of pressure on. But it’s excess cash flow over what we would have if we were just a single income family. … I guess we’ve both felt at various times that with both of us working and having a family you are kind of not doing anything as well as you could … so you sort of feel like you’re not quite giving enough to the family … [So buying the Waiheke house] is a way of saying, here’s a really really positive by-product that comes out of it … As a family unit we all have our tough weeks but this is one of the nice by-products that comes out of it.

One of the initial impetuses for their beginning to look for a holiday bach was the gifting of an inheritance from the wife’s grandparents several years before. This was not a large sum of money, as Peter said, it was not enough to “be life changing for us, it wasn’t going to pay off our mortgage, it wasn’t enough to upgrade our house or anything like that.” They looked at investing the money in a fund for the children later in life, he said that in 25 years the investment performance would “probably be reasonable … if you wanted to take equity out and give it to them” but it was the acquisition of a bach that became their focus. He said:

We looked at it from a financial point of view and saying if we took that money and used it as the deposit on a holiday bach [so] the kids would get a whole bunch of memories out of it. … and give them the holiday home longer term, leave it to them in a will or whatever. There’s a non-financial and a financial benefit of all of that as well. We kind of did look at it a little bit intergenerational as well.

For the Osbornes, the idea of buying a bach didn’t “actually make financial sense”. They had been using Bookabach to find holiday homes across the country for family holidays, but the convenience of having their own place became a consideration. But they also knew that a house on Waiheke was more than likely to be a good investment in the long term:

The more we talked about it, we said in terms of the equity we put into it over the very long run, unless something drastically changes in the whole psyche of New Zealand, then generally property goes up in value if it’s in a reasonable location. So, if you’re around the broader Auckland area you’re going to get some sort of growth. So long term, for a $200 or $300 grand deposit, you’re probably going to get a reasonable return on it. … In the end, I guess it might sound a bit sort of arrogant, but we kind of went “oh sod it. We work hard, we deserve it.” It’s a bit of a treat. It’s a bit like buying a really nice car. You know you’re going to lose money on it and you could get something that does the functions better, but it kind of makes you feel happy. There’s a bit of that factor. …So, the day jobs kind of went out the back door. It’s like going and treating yourself to a nice dinner or a nice holiday or a nice hotel. It’s sort of like we both work hard, we make a reasonable amount of money, sometimes you actually just have to burn it up on yourself because life’s short.

So, issues around mothering and working, family memories and memorializing inheritance from cherished grandparents, as well as seemingly not making an investment that really was an investment, created a situation where the social project of the home was entirely defined by the financial one for this couple.

This case, more than any of the others reported by our participants, fuses finance and home in such a striking way. It also points to the fact that middle-class, middle-income people do not buy holiday houses on Waiheke Island on a whim anymore, as was possible in the mid-1960s. The contrast between the Smith’s and their humble cottage, and the participants in our research who had bought their expensive properties within the last 5 years was notable. The more recent the purchase, the more likely that there was a mortgage on the property and therefore of financial considerations holding stronger sway in people’s lives. There is more to this than the passage of time: it is also influenced by a change in what people want and expect from a bach at the beach, and the consequent cost of more sophisticated housing. The difference is indicative of what financialisation of the everyday in the context of holiday house ownership now looks like.

Graham Smith related how he had happened by chance to be presented with the opportunity to purchase the large tract of land that he and his wife Milly have owned on Waiheke since the mid-1960s. He had gone to the island with a friend who was interested in buying a property. The friend did not end up purchasing, but in the course of their day on the island, the real estate agent showed them the land and one-roomed cottage that the Smiths now own – a classic example of a then very common, basic and low-cost form of holiday house. Graham was so enchanted by the beautiful native bush, and the small bare-bones cottage and its proximity to the beach, that he was able to commit to the purchase on a whim and could pay for the property outright and in cash from savings he had – not because he was wealthy or had a substantial amount of savings – rather he was able to do this because the land and small cottage were so very cheap relative to his early career middle-income. He said:

Well, we walked down this track [towards the beach], the grass was knee high, and we came upon this extraordinary little one roomed house, bach, with a kitchen down by a stream, completely separate, things hanging in shreds off the roof. It was a real wreck, but it was in basically two acres of bush … . And I just took one look at it and thought golly I could do it just for fun. In those days, as Milly has said, no one thought of an investment, nothing like that. It was the situation, the bush … And I could afford it from my savings, absolutely.

For Graham, the decision to buy the house and property did not include a recourse to financial constructs in any significant way – a veritable anachronism in the current environment. So dissonant is this participant’s narrative vis-a-vis the accounts of other more recent purchasers of holiday homes on Waiheke, that it is easy to dismiss the capacity to approach the purchase of a property in this way as merely a function of the time, place, and the relative cost of land on the island. But it is the implications of Graham’s capacity then, and the experiences of recent buyers of holiday homes on Waiheke, that emphasise the substance and normalisation of financialisation. While Graham Smith was able to purchase some 5000 m² of what is now classified as prime real estate with a wholly emotional motive devoid of any financial considerations, other more recent purchasers with equally strong emotional motives find themselves bound up in financial concerns as a primary consideration of purchase, ongoing ownership and use of their holiday houses. Forrest and Hirayama (2014, 235) argue in their discussion about financialisation that “historically the financial aspects of home ownership have often been backgrounded rather than foregrounded,” but what we are seeing here is not just a switching of polarities, but a whole new set of parameters within which financialisation works.

The awareness that our participants had of the paradox of house as home and investment was variable. None of them was immune to the meaning and effects of value as price central to developments in the Auckland housing market so richly described and analysed in various popular media. The case of the Smiths is particularly informative in this regard. When we arrived to interview them, Graham Smith pointed to a photocopy of an article that he said had appeared in the Auckland newspaper, The New Zealand Herald, some 20 years ago. It was titled “The Price of Affluence”: and he said that “this pretty much sums it up for us … you are going to find that we are at the pre-neoliberal end of your survey”. The article alluded to the way that money and affluence diminish and even contaminates social life. He was trying to convey a perspective that he and his wife were people who consciously spurned social status based on the display of affluence. During several hours of the interview, the couple talked about the 50-odd years they had been spending time on Waiheke: summer after summer they would invite large numbers of family members and other guests to stay for several weeks at a time to enjoy together the tracts of native bush on the land, the beach so near, and cook communally in the outdoor kitchen as people camped in the trees. Some came as children, and now those same kids are grown up and are bringing their own children back to the beautiful place in the summer. Their stories were about community and guardianship of the land. After the interview, Graham Smith sent us an email message elaborating his relationship to the land and the dwellings on their property on Waiheke. He said:

When I arrive home here at [their Auckland address] I know that this is a property and house which we own. When I walk on to the Waiheke property, I feel that it is land which I am holding in trust. Legally, “yes”, but psychologically I have never actually “owned” the trees and surrounding bush and so it will be until our time there has concluded. It has always been like that – right from the moment that I first bought it.

At the time of the interview, Graham and Milly were both in their 70s, they talked about the amount of work that the property on Waiheke, all 5000 m² of it, now constituted for them, and they conceded that it was getting too much. Towards the end of the interview, and in reference to this, the subject of their plans for retirement came up, which included selling the property on the island. Milly said:

We had it [the property on Waiheke] valued … we look upon it as security to look after us in our old age. … Because we don’t have children. So, we shall have to pay for whatever services we need, and above and beyond our superannuation, this is the bonus which actually was never expected. I mean we always knew we had it there to sell, but it’s, you know, we had no idea that [it was worth so much].

They did not mention the valuation figure but acknowledged that the bonus gave them choices, whilst putting to rest previous ways of interpreting their island experience. Moving to the island was not an option for their retirement. They felt that they would be too isolated from their community. They talked about their power, or lack of it, to ensure that the land did not fall into the hands of what they identified as the too many unscrupulous property developers on the island. They were in equal measure angered by what they saw as the terrible developments that have gone on the island in the last decade in particular, and philosophical about their capacity to do anything about this.

With the after-the-interview email message, Graham Smith was wanting to end on a note that referenced who he has always been, who he still is. What remained left unsaid, but explicit, nonetheless, was the fact that this sentiment is now not only an anachronism for middle-class people such as himself, but that he and Milly no longer have the space to operate this way, not because they don’t want to, but because that space has been all but eradicated by financialisation. What is different about Graham and Milly Smith is their awareness of this – and this is not a moral imperative in terms of choices for them or for our other participants either – this is about a process that the Smiths have consciously watched roll over them, one that they have little room to manoeuvre within.

Conclusion

Our research was guided by the question, what does housing financialisation look like in the everyday? We have been able to show how financialisation suffuses through time, as the values of finance bleed or cascade (Gudeman 2001, 2008) into a new domain and the fabric of people’s everyday lives as described by Bear et al. (2015). This is discernible in the change from an era when the house was explicitly not wholly a function of financial considerations, into one where the social project of the home is influenced significantly by such factors. The “Kiwi Dream” was fostered in a time when people’s need to attend to finance was not as great as presently. This was also the case for holiday house ownership. What our participants’ narratives have revealed is that people still value and interpret their holiday houses as home, but issues associated with finance may now often be to the fore and unavoidable. In theoretical terms, this attests to the veracity of Smith’s, 2015 conceptualization of the financial paradox and García‐Lamarca and Kaika’s (2016) and Lai’s (2018) biopolitical approach to the creation of new financial subjects and their interactions with global finance and real estate markets in neoliberal times, including with respect to mortgage debt. Our research on Waiheke Island also points to variation in the way that financialisation suffuses into house owners’ lives, and their interpretations of, and responses to it. For this reason, we agree with Van der Zwan’s (2014, 14) critique of those aspects of the literature that depict financialisation as a homogenous and irresistible force denying the agency of individuals and families in their everyday lives. It is more complex and subtle than that. Our research participants have shown us that “the possibilities to challenge the financialisation of the everyday are … limited, yet not impossible” (van der Zwan 2014, 114; see also Martínez and Gil 2022).

As advocated by Paris (2009), our study has also sought to enhance the theoretical links between global housing scholarship and the fields of tourism, recreation and rural studies. The first typically emphasizes (often urban) primary housing – as sites of necessity and experiences of home and sometimes housing stress – and the second speaks about (often rural and/or coastal) second or holiday houses, purchased using discretionary finance and primarily sites of family leisure. This brings the analytical frame of the financial paradox and biopolitical interpretations of financialisation, which are typically located in the housing studies paradigm, into a new realm where multiple dwelling, amenity landscapes, recurrent migration, and peri-urban real estate development are key ideas and add another layer of complexity to discussions about financialisation. In this study, these have been illustrated in the narratives we encountered during our fieldwork, including the history of financial highs and lows through the lives of individuals and families that have culminated in their purchase of their bach; expressed values about family, nurture, private space, security, rest and recreation; and the process of affect that has coloured the participants’ reactions to the multiscale, complex assemblage of the Auckland housing market.

Disclosure Statement

No potential conflict of interest was reported by the author(s).