Ratio of costs to income has not changed significantly over the last year
Both household income and housing costs saw significant increases prior to the COVID-19 pandemic, according to figures from Statistics New Zealand (Stats NZ).
Stats NZ figures showed that the average annual household disposable income (after tax and transfer payments) in the year ended June 2020 increased by 3.9% from $83,406 to $86,626 compared to the same period in 2019. Meanwhile, average annual housing costs increased 3.8% from $17,324 to $17,980 over the same period.
According to Stats NZ, this means that New Zealand households spent an average of $21 of every $100 of their income on housing costs – a figure that it says is “relatively unchanged from 2019.”
Read more: How much does an average Kiwi family pay for mortgage?
“Although the ratio of housing costs to household income hasn’t changed significantly over the last year, there are certain types of households, such as renters, that spend a higher proportion of their incomes on housing costs,” said Chris Pooch, income and poverty statistics manager at Stats NZ. “The ratio of housing costs to household income is an important measure because a high proportion of housing costs is often associated with financial strain, particularly for lower-income households.”
From a weekly perspective, average housing costs in the year ended 2020 were $354 a week, up 3.1% from 2019. For households making these payments, Stats NZ said increases were seen in property rates (up 5.0%), mortgage principal repayments (up 5.7%), and rent payments (up 4.8%).
Meanwhile, spending on mortgage interest payments decreased (down 6.7%) over this same period.
As a caveat, Stats NZ warned that it had stopped collecting data for its survey after the first lockdown was implemented in late March and “as a consequence, the data was produced from a smaller number of households than if Stats NZ had collected 12 months’ worth of data.”
However, Pooch said that the agency had “investigated the quality of the data that has been collected in the nine months and are satisfied that it is fit for purpose.”
