Big rents shatter home dreams

By ANNE GIBSON


The cost of keeping a roof over our heads is soaring, especially for people who rent.

A survey has found that a third of tenants pay more than 40 per cent of their net incomes on housing.

International benchmarks suggest that households spending more than 30 per cent of net income on housing are living beyond their means.

A study issued yesterday by the Government's Centre for Housing Research, but conducted by property consultant DTZ, showed housing had become much less affordable in the past 15 years.

It was especially tough for tenants, making it harder for them to buy their own homes and contributing to poverty.

Housing workers said some families crowded together in rental accommodation had a deficit of $130 a week after paying housing and other bills.


A chart with the study showed that a third of people who rent are paying more than 40 per cent of their income in housing expenses, but only 16 per cent of people who own their houses are paying this amount.

Aucklanders crippled by the cost of housing are much worse off than people who live in other areas.

The study found Aucklanders paying nearly double the national average of housing costs as a portion of net income.


"In the Auckland region, 22.8 per cent of households spent 40 per cent or more of their net income on housing related costs," the study found.

It said a big slide in affordability for owner-occupied and rental homes was "most marked in the Auckland region".

The trend has been developing since 1989.


Ian Mitchell, of DTZ in Wellington, said it was quite apparent that Aucklanders living in rented homes were the group suffering the most.

"Aucklanders are paying so much more than the rest of the country," he said.

Nor is it easy for them to escape the rental market. Renters struggling to raise a deposit for a house are trapped by the high cost of housing in the region.

"Those aspiring to home ownership are facing increased difficulty in crossing the threshold into home ownership as the deposit gap has increased," the study said.

People living in the Bay of Plenty and Canterbury are much better off than Aucklanders.

"Only 11.8 per cent of households in the Bay of Plenty region spent 40 per cent or more of their net income on housing costs, one of the lowest proportions for all regions.

"In the Canterbury region, 14.4 per cent of households spent 40 per cent or more of their net income on housing, close to the national figure of 14.8 per cent."

A report on the Statistics Department website says measuring the affordability of housing is complicated and inexact and various Government agencies had set benchmarks for measuring affordability.

Canada's Mortgage and Housing Corporation says a household is under its "affordability standard" if it spends more than 30 per cent of its income on housing costs.


The Australian Bureau of Statistics has defined households as experiencing "financial housing stress" if they are in the "bottom 40 per cent of the gross income distribution" and spend more than 25 per cent of income on housing.

The Salvation Army's social worker co-ordinator for Manukau City, Esteban Espinoza, said some renters were left with a $130-a-week deficit after paying their rent and living expenses.

Three-bedroom houses cost an average of $380 a week to rent, which he said many people could not afford.

Mercy nun Anne Hurley, who works in South Auckland, said many low-income families were taking loans at rates as high as 20 per cent to try to make ends meet.

Housing New Zealand said this year that on current trends, home ownership rates would fall to around 62 per cent by 2011 - equivalent to 80,000 fewer homeowners than today.


CHRANZ