Monday, May 02, 2016

A housing rental crisis?

The NZ Herald has a report  about the Salvation Army handing out increased numbers of food parcels  due to rising housing costs. In Auckland anyway.

Average rents for three-bedroom Otara houses rose from $382 a week in March 2014 to $466 this March
The article doesn't record the source so I am assuming it's from Barfoot and Thompson. Here's their March 2015 chart followed by March 2016.

The rise in the total South Auckland area, for 3 three-bedroom house, is a lot less than in Otara - 7  versus 22 percent.

But even then, Barfoot and Thompson say:
Over the last 12 months, Auckland saw an increase of $28 or 5.8% (for all property types). 
Whereas Stats NZ say, over the same period:

Rentals for housing increased 2.3 percent, with Auckland up 3.2 percent and Canterbury up 1.2 percent. 
3.2% is a much smaller increase than 5.8%

Auckland has always been one of the least affordable rental markets. But because it gets reported so much, people assume the same applies throughout NZ. It doesn't (though it suits the Sallies to fuel that perception when appearing on telly to promote their annual Red Shield Appeal.)

The following is from Statistics NZ  and shows rents as a percentage of equivalised household incomes for each NZ region:

(Left click for full table)

Those stats go to 2012. The average total rent payments in each of the following years has been:

2013  $273.50
2014  $288.90
2015  $301.00

But household incomes are also rising, even for beneficiaries (CPI adjustments yearly and recent $25 raise).

Just going back to Auckland, another aspect of the reported non-affordability is missed, at least when using official stats. Household incomes are equivalised according to number of members. So larger families will have their incomes reduced by the process. This means that the percentage that rent swallows is higher. That would certainly apply in South Auckland.


david said...

the sallies aren't the only ones providing special housing support for people living in Auckland. The government does too. So helping to sustain the Auckland housing crisis.

Anonymous said...

You need to mine the stats to get a real picture and thanks for making the effort. I leased wifey's latest rental the other day and it was clear there were heaps of people looking. Because wifey is making a buck each week (although I do the tidying up, maintenance and will take care of some minor improvements she wants done) people could be buying for less than rent. I think part of the problem is that we have a significant number who are doing life back to front - shagging, kids (unplanned), toys and destined to rent rather than save, marry, buy a house and kids like we did in the good old days.

Auckland in isolation is a mess but that could be solved over time if there was a will.