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The number of New Zealanders who own their own homes has fallen to the lowest level in nearly 70 years.
At the time of the 2018 census, 64.5 percent of households owned their own homes, according to data from a new report from Stats NZ, Housing in New Zealand: 2020.
Not only is it lower than the peak of 73.8 percent in the 1990s, it is the lowest rate since 1951, when only 61.5 percent of households owned their homes.
While homeownership rates had fallen in all regions since 1991, the biggest decline was in Auckland. Homeownership in the Super City fell from 72.7 percent in 1991 to 59.4 percent in 2018.
The median sales price in the region exceeded a million dollars in the latest data from the Real Estate Institute and the supply remains scarce.
Homeownership rates in New Zealand’s large cities are below average, but outside of major centers, homeownership is higher. Eight out of 10 households in Waimakariri and Selwyn districts live in owner-occupied housing.
The report also reveals that homeownership rates have fallen for all age groups, but especially for people in their 20s and 30s.
In 2018, 44 percent of 25 to 29-year-olds owned their own home, compared with 61 percent in 1991. For those in their 30s, the rate was 59 percent in 2018 , versus 79 percent.
Pacific people and Maori were less likely to own their home or keep it in a family trust than other ethnic groups.
But the report’s lead author, Dr. Rosemary Goodyear, said that even though home prices have risen faster than incomes in recent years, homeownership rates between 2013 and 2018 were relatively stable.
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Homeownership has declined, but appears to have stabilized between 2013 and 2018.
“This may reflect that first-time home buyers take advantage of KiwiSaver deposits and low-interest mortgage rates.”
The earliest date people were able to withdraw KiwiSaver funds to purchase a home was July 2010. By June 2020, 222,000 people had used KiwiSaver to help them purchase their first home.
Despite this, declining home ownership means that a higher proportion of households now rent.
In 1991, less than a quarter (22.0 percent) of households rented.
But at the time of the 2018 census, 31.9 percent of households, or 1.4 million people, including 120,000 children under the age of five, lived in rented houses.
On average, households that rent spend a higher proportion of their income on housing costs than do people who live in owner-occupied households.
Furthermore, the share of those who spend more than 30% of their income on housing has increased from less than 20% in 1988 to more than 40% in 2019.
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Households that rent spend a greater proportion of their income on housing costs than do owner-occupied households.
Goodyear said price indices showed that rents had risen in line with national income.
“But they have outpaced revenue growth in centers like Wellington and Auckland, where markets are particularly competitive.”
Homes that rent have less security of tenure than owner-occupiers, according to the report. They moved more frequently and were less likely to have lived in their home for long periods of time.
Housing affordability was another topic analyzed in the report. He noted that over the past five years, house prices had risen faster than wages.
Auckland households faced the biggest burden – the region’s median equivalent income after housing costs in the year to June 2019 was $ 30,100.
This left the median home sales price in Auckland in mid-2020 at approximately 11.5 times median household income.
While the report emphasized that rising home prices had created wealth for homeowners, it also said it has also made it difficult for aspiring homeowners to climb the property ladder.
