Widespread financial pressure from housing costs
A report from Stats NZ has highlighted an increasing burden on households in New Zealand, with a substantial number of low-income families spending more than 40% of their income on housing in the year ending June.
Sharp increase in housing expenditure among low-income families
According to Stats NZ’s latest figures, about one-third of households in the lowest income brackets are significantly burdened by housing costs.
Specifically, 31.7% of households earning under $41,600 and 31% of those earning between $41,600 and $69,999 allocated more than 40% of their income to housing.
This rate is considerably higher than the national average of 19.7% of all households spending above this threshold, marking an increase from 18.2% the previous year.
Costs outpacing income growth
“Although incomes increased, these statistics show that people spent a higher proportion of their money on housing costs than they had in the past,” said Chris Pooch, household financial statistics spokesperson.
The Stats NZ report also noted that average annual household disposable income (before housing costs) grew by 5.5% between June 2023 and June 2024.
However, this income increase was overshadowed by a 9% rise in average weekly rent payments and an 8.7% increase in weekly mortgage payments.
Increased living costs and financial hardship
The cost of living for the average New Zealand household rose by 5.4% in the 12 months to June 2024, with significant contributions from interest payments, private transport supplies, and rent.
The consumer price index for housing and household utilities also rose by 4.4%, becoming a major factor in the annual inflation rate.
Renters under strain
In 2024, 28.4% of non-homeowners were spending more than 40% of their disposable income on rent, with average weekly rent payments climbing to $465.50. A significant 55.2% of renters reported that their income was just enough or not enough to meet daily needs.
Homeowners facing increased mortgage pressures
For homeowners, the financial strain is evident as well, with 14.8% spending more than 40% of their disposable income on housing costs.
This burden is reflected in broader spending behaviours, as a recent survey showed that 62.6% of New Zealanders are prioritising mortgage or rent and utility bills above other financial obligations in the first half of 2025.
Mortgage payments increased sharply, with average weekly payments rising to $658.20 in 2024, and a notable 35.8% increase in mortgage interest payments compared to the previous year.
Material hardship affects one in 10
The Stats NZ study further revealed that 9.4% of households experienced material hardship in 2024, defined as lacking six or more essential items, which could include adequate heating, fresh food, or necessary healthcare.
This hardship particularly affects children, with a significant number living in conditions that meet the criteria for material hardship.
“What we’re seeing is continued housing costs pressure on both renters and those paying mortgages,” Pooch said. “Spending more on housing costs means there is less money left over to pay for other necessities.”
