Why advisers should take notice of housing
According to consulting firm Demographia’s housing affordability survey New Zealand’s housing is “severely unaffordable” at more than five times incomes, rising to more than six times in Auckland, where the rate of home ownership has dropped from 74% in 1986 to 58.7% in 2011.
Out-going Retirement Commissioner Diana Crossan said recently that the issue of people reaching retirement age without owning their own homes was even bigger than the rising cost of New Zealand Superannuation.
“Rates of poverty amongst retirees who own their own home outright are much lower than those who are still paying a mortgage or rent," Crossan told a seminar on the government’s fiscal projections earlier this month.
“Unfortunately, housing affordability has declined to a point where, now, a house costs five times a salary, compared to two-and-a-half times a salary in the 1990s, and rates of home ownership are declining."
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