Today, Statistics NZ reported on Rental affordability in New Zealand for 1998–2012 (PDF). As with most Statistics this department of the government releases, it's worded to paint the current administration in a good light. For instance, it starts off by saying:
That's great news isn't it? However you need to read further into the document to find out that things aren't really all that rosy:
It really depends on what stats are cherry picked to show whether house prices have increased faster than rents, because other data clearly contradicts this claim.
Statistics also show that in 2007 within the Auckland region a household paid 32 percent of median equivalised weekly household income on median weekly rent, in 2012 that had increased to 35 percent.
A similar increase in rents that wasn't matched by income increases was seen in the same time period from every region except Manawatu-Wanganui, which declined 0.9 percent and Otago, which stayed the same.
Statistics NZ also reported:
Clearly there are lots more people renting less affordable accommodation since National gained power in 2008. A 3 percent increase over five years might not seem like a lot, but when people's incomes were already stretched to the limit, any increase in rent that isn't matched by an increase in wages or benefits can have substantial detrimental effects.
Rental affordability has improved since 1998 but has declined slightly in most regions since the global financial crisis of 2008.
That's great news isn't it? However you need to read further into the document to find out that things aren't really all that rosy:
Affordability has declined since the 1980s
Census data shows that rental affordability has declined since the 1980s. This is partly due to changes in the private rental market. In 1986, only 62.2 percent of renting households rented from private landlords. Of the remainder:
• 23.5 percent rented from the Housing Corporation
• 7.4 percent rented from another government agency
• 6.9 percent rented from a local authority.
By 2006, 81.8 percent of renting households rented from a private person, trust, or business:
• 13.4 percent rented from the Housing Corporation
• 3.0 percent rented from local authorities.
The higher proportion of social housing in the earlier period kept median rents lower. In the 1980s, subsidised housing was also available through some employers – around 14 percent of households rented from their employer in 1986.
Rental affordability continued to decline in the 1990s. The period of high unemployment in the late 1980s and early 1990s suppressed income growth, while the introduction of market rents for state housing led to a sharp peak in median rent increases in the mid- 1990s.
Although rents have increased much more slowly than house prices (which doubled between 2000 and 2007 (Productivity Commission, 2011)), renting was more expensive in 2012 than in the 1980s.
It really depends on what stats are cherry picked to show whether house prices have increased faster than rents, because other data clearly contradicts this claim.
Statistics also show that in 2007 within the Auckland region a household paid 32 percent of median equivalised weekly household income on median weekly rent, in 2012 that had increased to 35 percent.
A similar increase in rents that wasn't matched by income increases was seen in the same time period from every region except Manawatu-Wanganui, which declined 0.9 percent and Otago, which stayed the same.
Statistics NZ also reported:
Because the Auckland region had the highest proportion of rented dwellings, affordability issues in Auckland affect the greatest number of households – around one-third of the population lives in rented dwellings.
Clearly there are lots more people renting less affordable accommodation since National gained power in 2008. A 3 percent increase over five years might not seem like a lot, but when people's incomes were already stretched to the limit, any increase in rent that isn't matched by an increase in wages or benefits can have substantial detrimental effects.
