Home ownership at 70-year low

The number of New Zealanders who own their own homes has dropped to the lowest level in almost 70 years.

At the time of the 2018 census, 64.5 per cent of households owned their own homes, according to data in a new Stats NZ report, Housing in Aotearoa:2020.

Not only is that down from the peak of 73.8 per cent in the 1990s, it’s the lowest rate since 1951 when just 61.5 per cent of households owned their homes.

While home ownership rates had fallen in every region since 1991, the largest decline was in Auckland. Home ownership in the Super City dropped from 72.7 per cent in 1991 to 59.4 per cent in 2018.

The region’s median asking price topped $1 million in the latest Real Estate Institute data.

Home ownership rates in the big cities are below the average, but outside the main centres, home ownership is higher. Eight out of 10 households in the Waimakariri and Selwyn districts live in an owner-occupied dwelling.

The report reveals that home ownership rates have fallen for all age groups – but especially for people in their 20s and 30s. In 2018, 44 per cent of 25 to 29-year-olds owned their own home, compared to 61 per cent in 1991. For those aged in their late 30s, the rate was 59 per cent in 2018, down from 79 per cent.

Pacific people and Ma¯ori were less likely to own their home or hold it in a family trust than other ethnic groups.

But the report’s lead author, Dr Rosemary Goodyear, said that despite house prices rising faster than incomes in recent years, home ownership rates between 2013 and 2018 were relatively stable. ‘‘This may reflect firsthome buyers taking advantage of Kiwisaver deposits and low interest mortgage rates.’’

The earliest date people were able to withdraw Kiwisaver funds to buy a house was July 2010. By June 2020, 222,000 people had used Kiwisaver to help them buy their first home.

Despite this, the decline in home ownership means that a higher proportion of households are now renting. Back in 1991, less than a quarter (22.0 per cent) of households rented. But by the time of the 2018 Census, 31.9 per cent of households – which equates to 1.4 million people including 120,000 children under the age of five – were living in rented homes.

On average, renting households spend a higher proportion of their income on housing costs than people living in owner-occupied households. Further, the proportion of those who spend more than 30 per cent of their income on housing has increased from less than 20 per cent in 1988 to over 40 per cent in 2019.

Goodyear said price indexes showed rents had risen in line with incomes nationally. ‘‘But they have outstripped income growth in centres like Wellington and Auckland where markets are particularly competitive.’’