Housing Facts

Affordability and Levels of Home Ownership in Wellington

1. Levels of home ownership are decreasing in Wellington.
2. The affordability of home ownership is decreasing in Wellington.
3. The Wellington housing market has been classified as severely unaffordable.
4. Median priced homes in Wellington are only affordable for households with more than one median income.
5. First time buyers need more than a single income to afford a lower quartile priced home in Wellington.
6. Wellington City is the 4th most expensive urban area for first time buyers.
References

Affordability and Levels of Renting in Wellington

7. The proportion of households that are renting in Wellington is increasing.
8. The cost of renting in Wellington has risen at a greater rate than household income.
References

Housing Stress in Wellington

9. The proportion of income spent on housing costs is increasing in Wellington.
10. Housing stress is experienced by over 20% of households in Wellington, i.e. they pay more than 30% of their gross income on housing costs.
11. Levels of housing stress are higher in low income households. Lower income households are also more likely to be paying high housing costs relative to their incomes.
References

Housing Need in Wellington

12. 15% of households in Wellington are in housing need.
13. There are over 1,100 people on the Housing New Zealand waiting list for Wellington City, Hutt Valley and Porirua. Over half of these have either a severe or significant housing need.
14. The level of housing need in Wellington is expected to increase over the next 20 years.
References

Housing Supply in Wellington

15. By 2031 Wellington has been forecast to have the country’s second largest undersupply of dwellings.
16. Wellington residential consent numbers in 2010 were 31% below the average level of the last decade. This figure was worse than any other region except Auckland.
References

Social Housing in Wellington

17. Over the last 20 years the number of households in Wellington Region in social housing has decreased by 30%.
18. The two largest providers of social housing in Wellington - Wellington City Housing and Housing New Zealand - have no plans to increase housing capacity.
References

Children, Young People and Housing

19. A significant proportion of New Zealand children live in dwellings that are cold, damp and expensive to heat.
20. Almost a third of at risk and vulnerable young people are in unsafe or insecure housing.
References

Housing Situation in New Zealand

21. New Zealand has experienced a greater decrease in levels of home ownership than other OECD countries.
22. Nearly a third of New Zealand households do not own the home they live in. People in rental accommodation are twice as likely not to have enough money to meet everyday needs.
23. The proportion of households spending more than 30% of their income on housing costs more than doubled between 1988 and 2009. Over a quarter of New Zealand households now fall into this group.
24. Levels of publicly owned housing fell by more than half between 1986 and 2006. Currently, there are over 10,000 people on Housing New Zealand's waiting list.
25. Indoor temperatures in nearly a third of New Zealand homes fall below the recommended minimum of 18°C.
26. 6.5 per cent of the New Zealand population lives in households requiring one additional bedroom; 3.5 per cent need two or more rooms. Crowding remains a significant issue, particularly in those areas with large Mäori, Pacific or refugee communities.
27. Household crowding is associated with high incidence of infectious disease, including acute rheumatic fever.
28. 780 people don’t turn up to work each day because cold, damp houses contribute to their illness.
29. Cold, damp homes result in 50 hospital stays each day (ward beds or emergency clinic).
References

Affordability and Levels of Home Ownership in Wellington

Between 1991 - 2006 levels of home ownership declined by 18.6% in Wellington City, 18.6% in Lower Hutt and 16.3% in Porirua.

A 2007 report of twelve NZ cities showed that Wellington City had the second lowest level of home ownership. Only Auckland City had a lower rate.

Census of Population and Dwellings. Statistics New Zealand 1991 and 2006. Quoted in Quality of Life '07 In Twelve of New Zealand's Cities. Quality of Life Project, 2007.

Levels of home ownership in Wellington Region are forecast to fall another 4.8% between 2006 - 2016.

The number of home owner households in Wellington Region is forecast to rise by only 1% between 2006 - 2016. During the same period the number of renter households is forecast to rise by 24%.

Source: Statistics New Zealand and DTZ Consulting and Research. Quoted in Census 2006 and Housing in New Zealand. Centre for Housing Research Aotearoa New Zealand, 2007

Over the period 1996 - 2006 house prices in Wellington increased by 163%. This was a greater increase than those seen in Auckland, Tauranga, Hamilton, Christchurch and Dunedin.

Source: Darroch Research. Quoted in Home and Housed: A Vision for Social Housing in New Zealand, HSAG, 2010.

House prices in Wellington outperformed the national average every year between 2005 and 2010. Between mid-2005 and mid-2010, the median house price in Wellington rose 37%, compared with a 27% increase nationally

Source: Real Estate Institute of New Zealand. Quoted in LMI Housing Outlook, QBE, August 2010.

In the year prior to February 2011 the national median house price did not change. In contrast, median house prices in Wellington Region increased by 4.2%.

Source: Real Estate Institute of New Zealand. Quoted in Roost - Home loan affordability in Wellington, Roost Mortgage Brokers, 22 March 2011.

A 2011 international survey of housing affordability classified the Wellington housing market as “severely unaffordable”.

7th Annual Demographia International Housing Affordability Survey: 2011 Ratings for Metropolitan Markets, Demographia, 2011

The median house price in Wellington City in October 2011 was $446,800 while the median take home pay was $984.70. Assuming a buyer has saved a 20% deposit, this means that it would take 52.5% of one median income to pay the mortgage on a median priced home.

Median priced homes are only affordable for households with more than one median income. A standardised household comprising of 1 adult full time worker, one adult worker working part-time and one child aged 5 years would spend 34.7% of its income on mortgage payments.

Source: Roost Home loan affordability in Wellington City. Roost Mortgage Brokers, 18 November 2011.

The situation for first time buyers in Wellington City is particularly severe. The lower quartile house price in Wellington City in October 2011 was $410,600 while the median take home pay in the 25-29 age group was $865.17. Assuming a buyer has saved a 10% deposit, this means that it would take 63.3% of one median income to pay the mortgage on a lower quartile home.

Lower quartile homes are only affordable for households with more than one median income. A standardised household comprising of 2 adult full time workers would spend 28.7% of its income on mortgage payments.

Using these figures a two income household would need an annual gross income of $78,730 in order to spend only 30% of its gross income on mortgage payments.

When comparing standardised households across 24 cities and urban areas, Wellington City was the 4th most expensive for first time buyers in terms of mortgage payment as a percentage of take home pay. Only households in North Shore, South Auckland and Queenstown pay a greater percentage of their take home pay on their mortgages.

Source: Roost Home loan affordability in Wellington City. Roost Mortgage Brokers, 18 November 2011.

Affordability and Levels of Renting in Wellington

Wellington City has the third highest median rent in the country. The only areas with a higher median figure are North Shore and Auckland.

NZ Residential Rental Market, September 2011, Quarterly Survey Volume 14, Number 3. Massey University Real Estate Analysis Unit.

Between 2000 - 2009 median rents increased by 72% in Wellington City, by 55% in Lower Hutt, by 84% in Upper Hutt, by 55% in Porirua, and by 50% in Kapiti.
During the same period the median household income in the Wellington Region increased by 42%.

NZ Residential Rental Market, June 2000, Quarterly Survey Volume 3, Number 2. Massey University Real Estate Analysis Unit.
NZ Residential Rental Market, June 2010, Quarterly Survey Volume 13, Number 2. Massey University Real Estate Analysis Unit.
Income Tables, Statistics NZ, 2010. Retrieved 9 September 2010, from http://www.stats.govt.nz/methods_and_services/access-data/TableBuilder/income-tables.aspx

Over the 2001 to 2006 period the percentage growth in the number of private-renter households was greatest in Wellington Region (17.3%).

Source: Statistics New Zealand and DTZ Consulting and Research. Quoted in Census 2006 and Housing in New Zealand. Centre for Housing Research Aotearoa New Zealand, 2007

The number of renter households in Wellington Region is forecast to rise by 24% between 2006 - 2016. During the same period the number of home owner households is forecast to rise by only 1%.

Source: Statistics New Zealand and DTZ Consulting and Research. Quoted in Census 2006 and Housing in New Zealand. Centre for Housing Research Aotearoa New Zealand, 2007

Housing Stress in Wellington

In 2006, there were an estimated 14,170 financially stressed households in Wellington City - i.e. households that were paying more than 30 percent of their gross household income in housing costs. 6,450 of the households were in rented accommodation and 7,720 were owner-occupiers.
This figure represents over 20% of households in Wellington City.

DTZ New Zealand and Stimpson & Co. Wellington City Housing Needs Assessment. Wellington City Council; Housing New Zealand, 2006
Census Summaries - 2006 - Family & Households, Wellington City Council, 2010. Retrieved 13 September 2010, from http://www.wellington.govt.nz/aboutwgtn/glance/census/family.html.

The proportion of rented households paying more than 30, 35 and 40 percent of their household income in housing costs in Wellington City in 2026 is projected to increase by 51, 53 and 56 percent respectively.

DTZ New Zealand and Stimpson & Co. Wellington City Housing Needs Assessment. Wellington City Council; Housing New Zealand, 2006

In Wellington Region the proportion of total household income that households spend on housing costs increased from 13.9 percent in 2006/07 to 14.6 percent in 2010/11.

Source: Household Economic Survey (Income): Year ended June 2011 – Tables, Table 2. Statistics New Zealand, 25 November 2011. Retrieved 12 December 2011 from http://www.stats.govt.nz/browse_for_stats/people_and_communities/Households/ HouseholdEconomicSurvey_HOTPYeJun11/Tables.aspx.

In a study of Auckland households, the level of housing stress was found to be higher in low income households. In addition, the proportion of households paying high levels of housing costs relative to their income is higher for lower income households.

Proportionally, housing stress is greater for renting households than for owner occupier households with similar incomes.

The Future of Home Ownership and the Role of the Private Rental Market in the Auckland Region. Centre for Housing Research, Aotearoa New Zealand and Auckland Regional Council, 2007

Housing Need in Wellington

The total number of households in housing need in Wellington City is estimated to be 10,188. This includes those households who pay more than 30% of their gross income on housing, households living in Housing New Zealand Corporation accommodation, households living in Wellington City Council accommodation who are not receiving the accommodation supplement, those living in emergency and third sector housing (including those on their waiting lists) and the homeless. This figure represents 15% of households in Wellington City.

The level of housing need in Wellington City is expected to increase over the next 20 years due to the moderate growth expected in population and the expected growth in house prices (at a much slower rate than in the recent past). Most of this growth will occur in those aged 45 and over and in one parent and one person households.

A Policy for Wellington City Council’s Social Housing Service, May 2010. Wellington City Council, 2010.

Around 630 households in Wellington City are in special housing need. By far the majority of these are beneficiaries. Special housing need applies to those who experience more than affordability issues and financial stress. Other factors include adequacy, suitability, accessibility and sustainability. In Wellington the main causes of need are poverty/affordability, sustainability of tenancies in the private sector and accessibility barriers tied to discrimination. Overcrowding and inadequacy in terms of the physical condition of homes tend to be limited to refugee and migrant people, people with physical disabilities and Pacific people households.

A Policy for Wellington City Council’s Social Housing Service, May 2010. Wellington City Council, 2010.

The number of households with housing needs is projected to increase by 3,310 between 2006 and 2026. This is an annual increase of 166 households per annum. The growth in support required can be met through the provision of additional social housing stock or alternatively the accommodation supplement. If no additional social housing units are supplied over the next 20 years, social housing providers will be supporting 33 percent of households in need in 2026, compared with 44 percent in 2006 and 50 percent in 2001. To maintain their level of support, at a ratio of assisting 44 percent of households in need, an additional 1,452 units would need to be added to the social housing portfolios in Wellington City over the next 20 years, or 73 units per annum.

DTZ New Zealand and Stimpson & Co. Wellington City Housing Needs Assessment. Wellington City Council; Housing New Zealand, 2006

Figures for August 2010 show that there are 1,137 people on the Housing New Zealand waiting list for Wellington City, Hutt Valley and Porirua. Over half of these have either a severe or significant housing need.

Waiting List by Neighbourhood Unit. Housing New Zealand, 2010. Retrieved 9 September 2010, from http://www.hnzc.co.nz/hnzc/web/rent-buy-or-own/rent-from-housing-new-zealand/waiting-list-by-nu.htm#wellington

Housing Supply in Wellington

By 2031 Wellington Region has been forecast to have the country’s second largest undersupply of dwellings.

Source: Draft Housing Report, DBH, 2010. Quoted in Home and Housed: A Vision for Social Housing in New Zealand, HSAG, 2010.

Residential consent numbers in Wellington were 31% below the average level of the last decade, which is worse than any other region except Auckland.

Source: Statistics new Zealand. Quoted in LMI Housing Outlook, QBE, August 2010.

Social Housing in Wellington

Between 1986 - 2006 the number of households in Wellington Region that were housed by Housing New Zealand Corporation fell by 33.7%.

Between 1986 - 2006 the number of households in Wellington Region that were housed by local authorities fell by 29.5%.

Source: Statistics New Zealand. Quoted in Census 2006 and Housing in New Zealand. Centre for Housing Research Aotearoa New Zealand, 2007

Wellington City Council is the largest social housing provider in the city with 2,352 units. Housing New Zealand Corporation is the other major provider of social housing in Wellington with 1896 dwellings. A further 104 units are provided by non-profit community based initiatives.

A Policy for Wellington City Council’s Social Housing Service, May 2010. Wellington City Council, 2010.

The Wellington Region population is forecast to increase 15.6% between 2006 by 2016.
Neither Housing New Zealand nor Wellington City Council have any plans to increase the capacity of their social housing stock.

Source: Statistics New Zealand and DTZ Consulting and Research. Quoted in Census 2006 and Housing in New Zealand. Centre for Housing Research Aotearoa New Zealand, 2007
Housing New Zealand Presentation. Wellington Regional Housing Hui, 21 April 2010
Wellington City Council Presentation. Wellington Regional Housing Hui, 21 April 2010

Children, Young People and Housing

By 2016 it is estimated that between 120,000 and 200,000 children will be in working families who are unable to enter home ownership.

Despite families with children heavily relying on the private rental market, less than half of landlords prefer families with children as tenants.

In 2004 it was estimated that 375,000 children lived in dwellings that were cold, damp and expensive to heat. This has an obvious effect on health.

In 2006, 17.2% of children aged 0-9 years and 15.3% of children aged 10-14 years were living in crowded households. Ethnic minorities were even more vulnerable – 46.3% of Pasifika children aged 0-14 years, 27.8% of Maori children and 22.3% of Asian children lived in crowded conditions.

In 2006 around 80,000 children aged 14 years or less were living in temporary dwellings.

Public Policy & Research / CRESA Children's Housing Futures. Centre for Housing Research Aotearoa New Zealand, 2010

30.4% of at risk and vulnerable young people are in unsafe or insecure housing. 2.5% have no fixed abode or live on the streets, 12.6% live in unaffordable, over-crowded or dilapidated housing, and 13.8% live in dwellings where they are exposed to criminality, sexual or physical abuse, gangs or drug-making.

There are between 14,500 and 20,000 young people aged 12-24 years old who are both at risk and vulnerable and are in insecure or unsafe housing.

85% of service providers believe unmet housing need presents a barrier to or inhibits at risk and vulnerable young people achieving positive outcomes.

International experience confirms that stable housing is critical to successful integration of at risk and vulnerable young people.

CRESA / Public Policy & Research Access to Safe and Secure Housing for At Risk and Vulnerable Young People. Centre for Housing Research Aotearoa New Zealand, 2008

In 1986 73.7% of all private dwellings were owner-occupied. By the 2006 census this had fallen to 66.9%. This has resulted in the relative disadvantage of the young, single parents and low income households. The most marked drop occurred among single parents responsible for raising children. Lower income groups were also noticeably less competitive in the home ownership market in 2006 than they were in 1991.

The Falling Rate of Home Ownership in New Zealand. Research Bulletin 13, Centre for Housing Research Aotearoa New Zealand, 2008

Housing Situation in New Zealand

The level of home ownership has fallen faster in New Zealand in the last 20 years than in any other OECD country.

The Right To Housing - Tika ki te Whai Whare Rawaka. In Human Rights in New Zealand 2010 (p. 207). Human Rights Commission, New Zealand, 2010

Almost a third of households do not own the dwellings they occupy, with the private sector dominating the rental market.

The Right To Housing - Tika ki te Whai Whare Rawaka. In Human Rights in New Zealand 2010 (p. 212). Human Rights Commission, New Zealand, 2010

People who lived in rented dwellings were found to be more than twice as likely as people who lived in owner-occupied dwellings to report that they did not have enough money to meet everyday needs.

Source: 2009 General Social Survey. Ministry of Social Development, 2009. Quoted in: The Right To Housing - Tika ki te Whai Whare Rawaka. In Human Rights in New Zealand 2010 (p. 212). Human Rights Commission, New Zealand, 2010

The proportion of households spending more than the internationally accepted benchmark of 30% of their income on housing costs was 27% in 2009 compared to 11% in 1988.

Source: Perry, B. Household Incomes in New Zealand: Trends in Indicators of Inequality and Hardship 1982–2009. Ministry of Social Development, 2010. Quoted in: The Right To Housing - Tika ki te Whai Whare Rawaka. In Human Rights in New Zealand 2010 (p. 209). Human Rights Commission, New Zealand, 2010

The most recent census data shows the proportion of rental housing publicly owned fell from 37.8 per cent in 1986 to less than half this at 18.2 per cent in 2006.

The Right To Housing - Tika ki te Whai Whare Rawaka. In Human Rights in New Zealand 2010 (p. 209). Human Rights Commission, New Zealand, 2010

As at 30 June 2010 there were 10,434 people on HNZC’s waiting list, with 386 (3.7 per cent) deemed to be in severe housing need, 4289 (41.1 per cent) in significant housing need and 3182 (30.5 per cent) with moderate housing need.

Source: accessed 7 July 2010 from http://www.hnzc.co.nz/hnzc/web/rent-buy-or-own/rent-from-housing-new-zealand/waiting-list.htm. Quoted in: The Right To Housing - Tika ki te Whai Whare Rawaka. In Human Rights in New Zealand 2010 (p. 209). Human Rights Commission, New Zealand, 2010

Almost a third of New Zealand homes fall below the World Health Organisation recommended indoor temperature of 18°C.

Source: Auckland Regional Public Health Services (2005). Quoted in: The Right To Housing - Tika ki te Whai Whare Rawaka. In Human Rights in New Zealand 2010 (p. 215). Human Rights Commission, New Zealand, 2010

In 2006, 389,600 people (10 per cent of the New Zealand resident population) lived in households requiring one or more additional bedrooms. Of these, 131,000 (3.5 per cent) needed two or more rooms.

Source: Ministry of Social Development (2009). Quoted in: The Right To Housing - Tika ki te Whai Whare Rawaka. In Human Rights in New Zealand 2010 (p. 216). Human Rights Commission, New Zealand, 2010

Housing shortages in some regions, particularly Auckland, have placed pressure on rental affordability. Crowding remains a significant issue in main cities and in some rural and provincial areas, particularly those with large Mäori, Pacific or refugee communities.

The Right To Housing - Tika ki te Whai Whare Rawaka. In Human Rights in New Zealand 2010 (p. 207). Human Rights Commission, New Zealand, 2010

Rates of acute rheumatic fever have been shown to be significantly and positively associated with household crowding in New Zealnd.

Jaine, R., Baker, M. and Venugopal, K. (2011). Acute rheumatic fever associated with household crowding in a developed country. The Pediatric Infectious Disease Journal, 30 (4).

780 people are absent from work each day because cold, damp houses contribute to their illness.

Better Performing Homes for New Zealanders: Making It Happen, New Zealand Council for Sustainable Development, 2008

50 hospital stays each day (ward beds or emergency clinic) occur because of cold, damp homes.

Better Performing Homes for New Zealanders: Making It Happen, New Zealand Council for Sustainable Development, 2008