By David Hargreaves
If you’ve thought in the past 10 years that your housing costs have been rising faster than your income – then you are probably right.
Statistics New Zealand’s new household income and housing costs figures for the year to June show that in the past 10 years housing cost rises did indeed outstrip increases in household income.
In fact in that period household income rose 42% while annual housing costs increased by some 50.5%. Both increases have been more than twice the rate of inflation over the same period.
Since 2007, average annual household income is up nearly $30,000 to reach $98,621 (before tax) in 2017.
But over the same 10 years, average annual housing costs increased from $10,658 to $16,037. Inflation, as measured by the consumers price index, increased 20.2%.
For the year ended June 2017, households spent an average of $16.40 of every $100 of their household income on housing costs, compared with $15.40 a decade ago
But the news is slightly better when looked at over just the past year – which of course has seen house price increases moderate.
In the year ended June 2017, average weekly housing costs were $318.50, almost unchanged from 2016. Lower mortgage interest rates helped to largely dampen any increases in housing costs.
Average mortgage interest payments were significantly lower for the June 2017 year (down 11.6% to $250.80 a week), falling from $283.70 a week for the year ended June 2016.
Of course, more recently, mortgage interest rates have started to edge up again as the banks respond to funding pressures through declining rates of deposit uptake.
Stats NZ said renters were almost three times as likely as home owners to spend 40% or more of their household income on housing costs.
For the June 2017 year, about one in five (20.8%) renting households spent 40% or more of their household income on rent and other housing costs.
In contrast, fewer than one in 10 (7.8%) of people who owned, or partly owned, their own home spent 40% or more of their household income on housing costs.
In the 10 years to June 2017:
► average annual household income (from all regular sources) increased 42%, to reach $98,621 for the year ended June 2017
► average weekly housing costs increased 52%, to reach $318.50 for the year ended June 2017.
For the year ended June 2017:
► average annual personal income was $51,945, up 7.7% from 2016
► average annual personal income for females increased at a much higher rate (9.2%) than for males (6.7%), when compared with 2016
► for every $100 of household income, New Zealand households spent an average of $16.40 on housing costs
► about 1 in 8 (12.5%) households spent 40% or more of their total household income on housing costs
► 65% of respondents reported their income was enough or more than enough to meet their everyday needs, while 10% stated they didn’t have enough to get by
► 82% of respondents said they were satisfied or very satisfied with their life in general.