Four in five renters cannot afford to pay their rent comfortably in New Zealand, and general housing affordability is getting worse, according to a Government report.
Results from the Housing Affordability Measure (HAM) by the Ministry of Business, Innovation and Employment (MBIE) find housing affordability is particularly bad in Auckland, alongside worsening affordability in Wellington and Canterbury.
The results covered the time period from March 2016 to March 2017.
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So how do you measure financial comfort when it comes to rent?
The average New Zealand household has $684 left over per person each week after paying rent or housing costs.
Renters, were they to make hypothetical mortgage payments on a "starter home" in the cheapest 25 percent of property in their area, would have less leftover money than the average, and unable to comfortably afford a first home.
Using this method, HAM reveals a whopping 79.86 percent of all renting households are not able to comfortably afford a first home in New Zealand.
Auckland stands out as the most unattainable city in the country, with 84.23 percent of residents unable to comfortably afford a first home.
HAM also uses a benchmark number to measure how many renters would be "highly stressed" if making mortgage payments. To qualify as "highly stressed" they would have to have just $222 left over per week for a single person, or $337 for a mortgage-paying couple.
A concerning 63.4 percent of Auckland renters would meet that benchmark, which is a significant increase from 2012, when less than half would qualify as "highly stressed".
The experimental new approach to measuring housing affordability was introduced last year after a review of the Official Statistics System in 2012, which is also the year that affordability began to worsen in New Zealand.
Cabinet found no existing housing affordability measures were able to capture the situation with enough detail, announcing HAM in May 2017.
Chris Bunny, MBIE deputy chief executive of building, resources and markets, said at the time of HAM's announcement it would provide "more finely detailed information about smaller areas".
HAM will continue to be refined by MBIE and Statistics New Zealand, and Mr Bunny hopes it will someday be adopted as part of the country's official statistics system.
Newshub.
