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Renting more affordable - HAM

It is more affordable to rent a property than it is to buy a first property, the Government’s new Housing Affordability Measure (HAM) shows.

Wednesday, May 10th 2017, 3:30PM

by Miriam Bell

New Zealand’s affordability issues have long been compounded by the fact that there has been no official way to assess them.

Plans for the HAM were first laid back in 2012, but there have been a number of delays with its development which have led to disquiet about its arrival.

However, today the Ministry of Business Innovation and Employment (MBIE) finally released the new HAM – and it shows that it is more affordable to rent than it is to buy a first home.

MBIE deputy chief executive building, resources and markets Chris Bunny said that the measure was a new approach to measuring housing affordability.

The HAM uses household-level data from the Statistics New Zealand Integrated Data Infrastructure (IDI) to provide a more accurate picture of how much New Zealanders spend on housing.

It also tracks whether housing is becoming more or less affordable over time for both renters and aspiring first home buyers.

Bunny said the measure provides a picture of shifts in affordability, broken down by local council and by ward in Auckland.

"It will provide important information to support Government and other stakeholder decisions and policies on housing."

Alongside the announcement that the HAM is up and running, MBIE also released the results of the first measure which covers the period March 2003 to June 2015.

The results show that housing was more affordable for renters than for first home buyers.

Further, they confirm that affordability for first home buyers in the Auckland market has worsened since 2011.

In contrast, affordability for first home buyers in Wellington has remained stable and the most affordable of the three big centres, while affordability for first home buyers in Christchurch has improved.

Not surprisingly, the results also show that Auckland was the least-affordable region for housing for renters, as well as first home buyers.

Housing affordability for Auckland renters was worse in 2015 than it was before the global financial crisis, but has improved since 2013.

Bunny said today’s release was part of an “experimental statistical series”.

This means the measure will continue to be refined to ensure it remains fit-for-purpose and that the results are robust and meaningful, he said.

New releases are planned for quarterly intervals.

Read more:

Affordability measure problems 

Auckland no longer least affordable 

« Cost inflation impacting on developmentFree Investment Property Showcase Events: Auckland, Wellington and Christchurch »

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 ▼6.39 ▼6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.50 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.17 5.79 5.69

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