House prices have been rising at a faster rate than wages over the past five years
The rate of people who own a home in New Zealand has hit a record low – the lowest rate since 1951, according to Statistics New Zealand.
Stats NZ's latest report, Housing in Aotearoa: 2020, focuses on how New Zealand's housing stock provide suitable, affordable, and secure homes for Kiwis. It analysed housing information from many various sources to understand housing in the country better, including the 2018 Census, the 2019 economic survey, the 2018 and 2019 social and pilot housing surveys, and the 2020 quarterly employment survey.
According to the report, homeownership rates reached its highest point in the 1990s, with 73.8% of people owning a home. However, by 2018, the rates had plummeted to 64.5% – with ethnic minorities and people in their 20s and 30s rating much lower. The most common reason given by renters who had moved to another rental property in the last five years was because the landlord ended their tenancy.
“There were considerable disparities in homeownership rates by age, with homeownership rates higher for older people. Pacific peoples and Māori were less likely to own their home or hold it in a family trust than other ethnic groups. They were also more likely, along with people with Asian, Middle Eastern, Latin American, or African (MELAA) ethnicity, to live in public housing,” Stats NZ said.
“By 2018, just over 1.4 million people lived in houses they did not own, including 120,000 children under five years of age. Although private renting predominated for all age groups, almost one-third of renters aged 65 and over lived in social housing.”
House prices in New Zealand have also been rising at a faster rate than wages over the past five years, with the Auckland median house sales price in mid-2020 hitting 11.5 times the median household income.
“Lower mortgage rates in recent years have benefited existing mortgage-paying homeowners. This means that mortgage interest payments (repayment affordability) are estimated to be similar in 2020 to those in 2010, despite the increase in property prices,” Stats NZ said.
