Rise in housing costs outpaces income

Many households feel they are struggling to meet their everyday needs, but Kiwis are generally happy with life, Statistics NZ says.

Housing costs have jumped more than 11 per cent in two years, outstripping the percentage lift in incomes.

Statistics NZ figures show that in the two years to June 2014, average household weekly spending on housing costs rose 11.1 per cent, from $256 to $284. That is equal to a $1456 a year rise in housing costs, to an average of almost $14,800.

The latest Household Economic Survey also shows average annual household income rose 9.1 per cent in the two years to June 2014, from $81,227 to $88,579. So average incomes rose $7352 over the two years.

But the Green Party claimed that rising incomes were not keeping up with rising costs and the change in household fortunes was not shared evenly. 

The number of households making more than $123,300 a year rose by 14.7 per cent, and there were 2.9 per cent more households earning under $32,100. All other groups fell slightly or remained the same..

"The National government has lost sight of what really matters for most kiwis - raising incomes ahead of costs," Green Party social development spokesperson Jan Logie said.

"A staggering 41 per cent of respondents in the survey said that their income was just enough or not enough to meet their everyday needs," Logie said.

Nearly two-thirds of households with total income under $31,900 said their income was not enough or only just enough to meet their everyday needs, while 16 per cent of respondents from households earning over $131,700 found their income inadequate or barely adequate.

However, 80 per cent of respondents said they were satisfied or very satisfied with their life at the time of the survey. Six per cent said they were dissatisfied or very dissatisfied, and 13 per cent were neutral.

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On average, 16.3 per cent of household income was spent on housing costs such as mortgages, rent, rates, and building-related insurance, up from 15.4 per cent a year before.

For households that owned or partly owned their own home, more than 14 per cent spent 30 per cent or more of their total household income on housing costs. 

For households that rented, more than a third, 34.2 per cent, spent 30 per cent or more of their total household income on housing costs.

"The increase in housing costs was largely due to higher mortgage and rent payments, as well as an increase in property rates," Statistics NZ labour market and household manager Diane Ramsay said.

"A really interesting shift we've seen is that a bigger proportion of mortgage spending is going on repaying the principal than on covering the interest payments."

The average weekly mortgage payment was up from $357 in the year ended June 2012 to $389 in 2014.

Average weekly rent payments rose from $273 to $290, a rise of 6.3 per cent over two years, in part reflecting higher rents in Canterbury after the big quakes destroyed or damaged many homes.  

Average weekly household spending on rent was highest in Auckland ($353), followed by Wellington ($308).

 - The Dominion Post


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