Home ownership rates drop

Proportion of Kiwis owning house they live in has hit a 64-year low

New Zealand's home ownership rate is now the lowest it has been for 64 years, Statistics NZ says.

The report A Century of Censuses, published by the agency yesterday, shows that we are now more likely than a century ago to live in flats and townhouses, to live in the North Island and to be Maori.

Home ownership has risen and fallen twice in the century. From 53 per cent when first counted in 1916, it rose to 61 per cent in 1926, only to crash to 50 per cent in 1936.

A huge postwar programme of cheap State Advances loans and an ability to capitalise the family benefit raised home ownership to a peak of 73.5 per cent in 1986 and 1991.

Family benefits were abolished in 1991 and state lending for home ownership also ended in the 1990s. Most homes built since then have been large ones for high-income earners, and home ownership rates dropped back to 64.8 per cent in 2013, the lowest since 1951.

Surprisingly, however, declining home ownership has not translated into proportionately more flats and townhouses. The biggest increase in the share of "joined dwellings" in the housing stock was actually in the 20 years up to 1976, when flats and other joined dwellings doubled from 9 per cent to 19 per cent.

Auckland University architecture historian Bill McKay said many old villas were divided into several flats at that time to accommodate young flatters. However, the building code was tightened in the late 1970s for fire safety reasons, so subdividing old villas stopped and the 2013 Census figures were barely changed from 40 years earlier, with 18.3 per cent in flats and townhouses and 81.7 per cent in separate houses.

Family sizes have shrunk over the century. In 1916, 60 per cent of married mothers had at least three children, including 32 per cent with at least five children and 5 per cent with at least 10.

The numbers of large families (five-plus children) halved to 15 per cent by 1976, and halved again to 7.6 per cent in 2013. Today, two children are by far the most popular family size.

A consequence of smaller families is that the average household has halved from 5.2 people per dwelling in 1886 to just 2.7 people today. The Maori population has grown 11-fold, from 53,000 in 1911 to 600,000 in 2013, while the non-Maori population has grown only 3.7 times from almost exactly 1 million to 3.8 million.

Waikato University demographer Ian Pool said this was largely because of a high birth rate and a declining death rate, which raised the Maori rate of natural increase close to the "biological maximum" at around 4 per cent a year in the 1950s. That has dropped since then but is still higher than for Europeans.

Immigrants were a factor in the 19th century, accounting for 50 per cent of the population in 1881. The overseas-born component then shrank steadily to 14 per cent in 1951, grew slowly again to 16 per cent in 1986, and has grown strongly since immigration laws were relaxed in 1987 to reach 27 per cent of the population in 2013 - their highest share since 1911.

More Kiwis lived in the South Island than in the North Island from the first count in 1874 until the end of the 19th century. The north pulled ahead in 1901 and has grown much faster ever since to house 76 per cent of us by 2013.