From Statistics New Zealand comes a new report showing how housing costs have outstripped income rises over the past decade, despite falling interest rates:
Since 2007, average annual household income is up nearly $30,000 (42.0 percent), to reach $98,621 (before tax) in 2017.
Over the same 10 years, average annual housing costs increased from $10,658 to $16,037 (up 50.5 percent), according to the latest household income and housing-cost statistics.
Inflation, as measured by the consumers price index, increased 20.2 percent.
Household income includes any income from wages and salaries, self-employment, investments, government benefits, and superannuation. Housing costs include rent and mortgages, property rates, and building-related insurance…
For the year ended June 2017, households spent an average of $16.40 of every $100 of their household income on housing costs, slightly more than the $15.40 they spent a decade ago…
“Housing costs have been held in check by lower mortgage interest rates, which affected both floating and two-year fixed mortgages,” Mr Broughton said…
Renters were almost three times as likely as home owners to spend 40 percent or more of their household income on housing costs. For the June 2017 year, about one in five (20.8 percent) renting households spent 40 percent or more of their household income on rent and other housing costs. In contrast, fewer than one in ten (7.8 percent) of people who owned, or partly owned, their own home spent 40 percent or more of their household income on housing costs…
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
