Affordability better for renters

New government data revealing that renting remains more affordable than buying a first home means the country’s tenant pool is not likely to dry up.

Wednesday, August 16th 2017, 3:00PM

by The Landlord

MBIE has just released the latest instalment in its Housing Affordability Measure (HAM) and it shows that housing affordability remained virtually unchanged over the period measured.

The new data is not current – rather it covers the three quarters from September 2015 to March 2016.

At a national level, the HAM data shows the share of first home buyer households with income after housing costs decreased slightly from 78% in June 2015 to 77% in March 2016.

But the share of renter households with income after housing costs came in at 60% in March 2016, which was a decrease from 62% in June 2015.

In Auckland, the share of first home buyer households with income after housing costs remained unchanged at 82% between June 2015 and March 2016.

At the same time, the city’s share of renter households with income after housing costs decreased from 58% in June 2015 to 56% in March 2016.

This suggests that renting is more affordable than buying a first home, both nationally and in Auckland.

MBIE spokesperson Michael Bird said today’s HAM release included a Housing Percentage perspective and a Housing Index perspective.

“By providing these two additional perspectives MBIE can outline a more comprehensive view than the original benchmark as a standalone series.”

Further, MBIE is confident that will bring the HAM data closer to real time in future – although it will always be two quarters behind real time.

The HAM has a controversial history because it took five years for any data to be released following the commissioning of the measure by Cabinet back in 2012.

Prior to the release of the first lot of data earlier this year, the government’s political opposition had started to suggest the data was being deliberately withheld.

But the first HAM release confirmed that, as was expected, housing affordability for Auckland first home buyers had worsened since 2011.

Public dialogue around housing affordability tends to focus on Auckland.

Yet, according to Massey University’s ongoing Home Affordability Report series, it is the Central Otago Lakes region which is now the least affordable region in the country.

Read more:

Renting more affordable – HAM

Decline in affordability around NZ

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