In August 2012, as part of a review of the Official Statistics System, the New Zealand Cabinet agreed that work should be undertaken towards the creation of a Tier 1 official statistic on housing affordability, so as to understand the state of housing affordability in more detail. For this reason, it was decided to develop the Housing Affordability Measure (HAM). The HAM is an experimental statistical series which consists of two indicators, each looking at a different population: the potential first home buying population and the renting population. Affordability is calculated based on actual housing costs for current renters, and potential housing costs for renters if they were to transition to home ownership by purchasing a modest home in the area in which they currently live.
As the lead government agency on housing policy, the Ministry of Business, Innovation and Employment (MBIE) assumed the responsibility for developing these two indicators. The HAM’s most recent results (up to June 2015) are now available and are communicated within this paper. The paper presents key findings about housing affordability trends at a national level and for the three most populous regions of New Zealand. A first annex provides a snapshot of the most recent levels of housing affordability for all regions, and a second annex provides further context for the development of the indicators and an overview of the methodology used to calculate them.
The findings of this first Housing Affordability Measure show that housing is more affordable for renters than for first home buyers. They also confirm that the Auckland market continues to be challenging for first home buyers.
- Renting in New Zealand is consistently more affordable than buying a first home
- At a national level, housing affordability for first home buyers worsened from 2003 to 2009, with affordability remaining more stable between 2009 and 2015
- At a national level, housing affordability for renters was worse in June 2015 than it was before the global financial crisis, but has been improving since 2013
- In June 2015, of the three most populous New Zealand regions, the region with the least-affordable housing for both first home buyers and renters was Auckland
- Housing affordability for first home buyers in Canterbury has improved since 2008
- Housing affordability for renters in Canterbury has improved since 2011
- Between March 2013 and June 2015, housing affordability for first home buyers in Auckland has worsened
- Housing affordability for renters in Auckland was worse in 2015 than it was before the global financial crisis, but has improved since 2013
- Housing affordability for first home buyers in the Wellington region has followed the national trend: it is worse than it was in 2003, but has improved since 2008
- Housing affordability for renters in the Wellington region is worse than it was before the global financial crisis, but has improving since 2013