Housing affordability

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Affordable housing is important for people’s wellbeing. For lower-income households especially, high housing costs relative to income are often associated with severe financial difficulty, and can leave households with insufficient income to meet other basic needs such as food, clothing, transport, medical care and education. High outgoings-to-income ratios are not as critical for higher-income households, as there is still sufficient income left for their basic needs.

Current level and trends

In 2009, 27 percent of New Zealand households spent more than 30 percent of their disposable income on housing costs. This was around the same level as in 2007 (26 percent) but an increase on the 2004 level (21 percent). Since the late-1980s, there has been a substantial increase in the proportion of households spending more than 30 percent of their income on housing. Between 1988 and 1997, the proportion rose from 11 percent to 25 percent of households, before levelling off at 24 percent in 1998 and 2001, and falling to 21 percent in 2004.

Figure EC4.1 Proportion of households with housing cost outgoings-to-income ratio greater than 30 percent, 1988–2009

Source: Derived from Statistics New Zealand’s Household Economic Survey (1988–2009) by the Ministry of Social Development
Note: Between 1998 and 2004, the Household Economic Survey was conducted on a three-yearly basis, rather than annually.

Socio-economic differences

High housing costs relative to household incomes are of more concern for low-income households. The proportion of households in the lowest 20 percent (lowest quintile) of the equivalised household income distribution spending more than 30 percent of their income on housing trebled between 1988 and 1994, rising from 16 percent to a peak of 48 percent. The rate levelled off at 41–42 percent over the period 1996–2001, fell to 34 percent in 2004 and remained close to that level in 2007 and 2009 (33 percent). The proportion of low-income households spending more than 30 percent of their income on housing was twice as high in 2009 as it was in 1988.

Age and sex differences

In 2009, 37 percent of children aged under 18 years lived in households with housing costs exceeding 30 percent of household disposable income, an increase from 32 percent in 2007.

In 2009, there was no difference between males and females aged 15 years and over in the proportion living in households spending more than 30 percent of their income on housing (both 25 percent).

Table EC4.1 Proportion (%) of the population in households with housing cost outgoings-to-income ratio greater than 30 percent, selected years, 1988–2009

Source: Derived from Statistics New Zealand’s Household Economic Survey (1988–2009) by the Ministry of Social Development
Note: Data is for March years in 1988, 1993 and 1998 and for June years from 2001.

Ethnic differences

Households with housing costs in excess of 30 percent of income are more common when they include at least one non-European adult.⁶⁹ For households with at least one Māori adult, the proportion increased from 8 percent in 1988 to a peak of 36 percent in 1997, fell to 21 percent in 2004, rose to 29 percent in 2007, then fell to 25 percent in 2009.

For households with at least one Pacific adult, the proportion increased from 15 percent in 1988 to 48 percent in 1997, fell to 23 percent in 2004, rose to 30 percent in 2007 and increased further to 33 percent in 2009.

Figure EC4.2 Proportion of households with housing cost outgoings-to-income ratio greater than 30 percent, by ethnic group, selected years, 1988–2009

Source: Derived from Statistics New Zealand’s Household Economic Survey (1988–2009) by the Ministry of Social Development
Notes: (1) Data is for March years in 1988, 1993 and 1998 and for June years from 2001. (2) Household ethnicity is defined by the presence, within the household, of an adult of a particular ethnic group. Adults are defined as people aged 18 years and over.

» View technical details about the housing affordability indicator