Household Housing Trends and Costs Analysis

This study analyzes household housing trends, costs, and tenure based on data from the Household Economic Survey and Tax and Welfare Analysis model. It examines housing costs relative to income, ownership distribution by age and ethnicity, and changes over time. The findings provide insights into the housing landscape across different demographics, highlighting variations in tenure types and cost burdens.

• Housing trends
• Housing costs
• Tenure analysis
• Household economics
• Demographic insights

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1. Household housing: tenure, costs, and trends Dr Luke Symes Senior Modelling Analyst Analytics & Insights 18 July 2022

2. Data Household Economic Survey (HES) 2006/07 to 2020/21 Tax and Welfare Analysis (TAWA) model 2018/19 to 2020/21 Caveats apply Survey data, sampling errors, sample sizes IDI Disclaimer These results are not official statistics. They have been created for research purposes from the Integrated Data Infrastructure (IDI) which is carefully managed by Stats NZ. For more information about the IDI please visit https://www.stats.govt.nz/integrated-data/. The results are based in part on tax data supplied by Inland Revenue to Stats NZ under the Tax Administration Act 1994 for statistical purposes. Any discussion of data limitations or weaknesses is in the context of using the IDI for statistical purposes, and is not related to the data s ability to support Inland Revenue s core operational requirements. 2

3. Analysis Consider households By age of oldest person in household By tenure: paying rent, paying a mortgage, owned outright By ethnicity (HES19, 20, 21): did anyone in the household identify as M ori or Pacific In the last three years Housing costs (rent, mortgage, rates, body corp fees, insurance, *maintenance) Housing costs relative to NZ Super income Over the last 14 years Trends in housing costs over time Trends in housing tenure over time 3

4. All households: housing costs (population) 66% of all senior households own outright 13% are paying a mortgage 20% are paying rent

5. Mori households: housing costs (population) 47% of M ori senior households own outright 18% are paying a mortgage 35% are paying rent

6. Pacific households: housing costs (population) 27% of Pacific senior households own outright 27% are paying a mortgage 46% are paying rent

7. All households: housing costs (% in group) Rent costs are high Increasing for 18-44 Mortgage costs are highest Decreasing for 45-64 Outright-ownership costs are low Increasing for 65-74 7

8. Mori households: housing costs (% in group) Rent and mortgage costs are shifted lower overall Similar trends for households paying rent Sample size limitations, particularly for seniors

9. Pacific households: housing costs (% in group) Higher rent costs Higher mortgage costs Sample size limitations, particularly for seniors 9

10. All households: housing to NZS (% in group) Relative costs increasing Shift from <20% to 20-40% Mortgage & rent are high Costs generally higher for 65-74 than for 75+ Particularly for households who are paying rent 10

11. Mori households: housing to NZS (% in group) Similar to overall population Rent & mortgage costs higher Sample size limitations

12. Pacific households: housing to NZS (% in group) Evidence of higher relative costs More households with 80%+ Multi-generational households Sample size limitations 12

13. Housing costs over time Mortgage and rent costs rising faster than outright ownership costs Rent & mortgage trend likely linked to earnings trends Maintenance costs (solid shapes) have data issues 13

14. Housing costs over time by age Rent & mortgage costs increasing faster for younger households Rent costs higher for younger households Outright owners have lower costs at all ages 14

15. Housing tenure over time Outright ownership has been decreasing Proportion of households paying rent has increased Proportion of households paying a mortgage has stayed relatively constant Link to rising house prices? Households taking longer to finish paying their mortgage, while others cannot afford to buy & start paying a mortgage? 15

16. Housing tenure over time by age 45-54 Own -> Paying rent 55-64 Own -> Paying rent or paying a mortgage 65-74 Own -> Paying a mortgage 75+ Own -> Paying rent 16

17. Housing tenure over time by generation Rates shifting for older cohorts Lower rate of outright ownership Higher rate of paying rent 17

18. Conclusion There is a long-term shift from owning outright (lower costs) towards paying rent (higher costs) Proportion paying >20% of NZ Super on housing appears to be increasing Seniors who pay rent or a mortgage are more likely than outright owners to be spending >40% of NZ Super on housing Long-term trends suggest there may be more seniors paying rent in the future 18