A breakdown of predicted retiree homeownership rates has been revealed in new figures published by the Retirement Commission, which point towards a larger chunk of over-65s being forced to continue paying a mortgage or renting later in life.
Te Ara Ahunga Ora Retirement Commission had the Treasury analyse New Zealand's Household Economic Survey to delve into how many superannuants were still paying rent or a mortgage.
The report showed about two-thirds of renters aged between 65 and 74 were spending 40 percent or more of the $463 NZ Super income on housing. That figure was worse for those still paying a mortgage, with more than half of people in the same age group spending over 80 percent on repayments.
"When comparing to those who own their homes outright this is almost totally reversed, with approximately 80 percent spending less than 40 percent of NZ Super on housing costs," Te Ara Ahunga Ora policy director Suzy Morrissey said. "More than 50 percent spend less than 20 percent of NZ Super on housing costs (55 percent of those aged 65-74 and 70 percent of those aged 75+)."
Dr Morrissey said while the analysis didn't factor in other earnings, NZ Super was the primary source of income for 40 percent of those aged 65 and over - with only 20 percent having a little more cash on top of that.
The report also found the balance of homeownership for people in their early 60s was expected to shift dramatically.
In 2018, 80 percent were homeowners v 20 percent renting. That was expected to tilt to 60 percent owning a home v 40 percent paying rent.
Dr Morrissey said retirees were being forced to use large amounts of their NZ Super to cover housing costs.
"When NZ Super was introduced, it was with the underlying assumption that those accessing it would be mortgage-free homeowners.
"Today, the reality is very different. There are declining homeownership rates, more people needing to continue working longer because they still have mortgages to pay, are paying rent or haven't been able to save enough to retire."
By 2040, the 40 percent of people in their early 60s still renting would equate to as many as 600,000 people.
"It's a real challenge for people to make ends meet if they are having to use substantial amounts of their NZ Super to cover housing costs," Dr Morrissey said.
