Costs keeping pace as incomes rise

New Zealand households now earn more than 40 per cent more than they did 10 years ago, Statistics New Zealand says.

It has released new data that shows the average household income is now $98,621, up almost $30,000 compared with 2007.

Over the same period, average annual housing costs increased from $10,658 to $16,057.

That reflects lower interest rates, which reduced what homeowners paid on their mortgages, even as property became more expensive for new buyers.

Statistics NZ’S labour and income statistics manager, Sean Broughton, said that meant the ratio of housing costs to income had not changed significantly.

‘‘Housing costs have been held in check by lower mortgage interest rates, which affected both floating and two-year fixed mortgages,’’ Broughton said.

Average mortgage interest payments were significantly lower for the June 2017 year, down 11.6 per cent to $250.80 a week, from $283.70 a week for the year ended June 2016.

Average annual household income has risen faster in Auckland than anywhere else in New Zealand. For the past four years, Auckland households have been raking in an average income of more than $100,000 a year.

This year, that ticked over $120,000 for the first time.

That is compared with an average of $113,701 in Wellington and $88,935 in Canterbury.

‘‘Auckland has higher paying industries and occupations – for example, there are a lot more finance jobs,’’ economist Shamubeel Eaqub said.

The majority of jobs in Auckland were in the private sector, whereas in Wellington many jobs were government-related, Eaqub said.

As for Christchurch, postearthquake construction has peaked, and the economy lagged behind Auckland in size and scale.

Eaqub said head offices were increasingly likely to be in Auckland, and with them top executives with higher incomes.

‘‘By the sheer number of people, Auckland has a much bigger talent pool, so it makes sense for offices to be co-located.’’

Aucklanders received an average 2.4 per cent pay rise in in the last year, while wages fell 1.4 per cent in Wellington and 0.4 per cent in Christchurch, according to Trade Me Jobs figures.

Trade Me head of jobs Jeremy Wade put Auckland’s high incomes down to a competitive job market and the cost of living.

ANZ in March estimated the job vacancy rate was at its highest point since 1994.

Wade said Trade Me had a record number of job listings for the last year.

‘‘We’ve seen this change because Auckland’s job market is extremely competitive. Employers are struggling to find the people they need,’’ Wade said.

‘‘Also, with Auckland’s high cost of living, there is inevitably more pressure on wages than elsewhere in the country.’’

Key sectors such as construction were driving the change, Wade said.

Earlier this year, Trade Me saw a 21 per cent jump in the average salary for Auckland construction jobs from $82,000 to just under $99,000.

But Eaqub said while Auckland incomes were rising, so were people’s expenses.

‘‘The cost of living is higher than other places and rising faster – so Auckland workers have higher pay demands.’’

About 31 per cent of all New Zealand households spent a quarter or more of their total income on housing costs last year, according to Statistics NZ.