A study has found that people who own their homes outright have stronger financial well-being than renters or mortgage holders.
A study has found that people who own their homes outright have stronger financial well-being than renters or mortgage holders.
Renters have lower life satisfaction than homeowners, a new study has found. And with a 142% increase in rents over the past 16 years, that well-being gap has widened.
A 40-year-old central Auckland homeowner told the Herald that owning was good “in some ways”, giving her freedom to make alterationsand affording her more disposable income than her friends who rent.
“I can do things to my house, and I don’t have to worry about if I’m going to be able to stay living there or be moved. So, I can do things like paint or put up fences or make my house nice,” said the homeowner, who wished to remain anonymous.
“And it’s good to know that I bought my house when I was in my early twenties, when it wasn’t too expensive. Some of my friends who rent [in the area] where I live have less money to do things.
“But then, I have maintenance on my house that they don’t have to pay. And there’s a lot going out to my mortgage. That is less than rent in the area, but then I have insurance.”
A renter in North Auckland told the Herald he thought renting affected his wellbeing “to an extent”.
“I can do things to my house, and I don’t have to worry about if I’m going to be able to stay living there or be moved," says one homeowner.
“When you look at what you get paid and then the amount that comes out for rent, it’s quite demoralising, especially while trying to negotiate other bills and financial things. It’s tricky when you do see a large chunk coming out [on payday].”
The 28-year-old, who lives with his partner and wished to remain anonymous, said they had thought about buying together and whether it would make them better off.
“While there’s always the uncertainty of renting, that you could get kicked out or have to maintain someone else’s property, when you talk to people who do own homes, you hear some of the costs that are involved and you think, ‘I’m actually glad to be renting’.”
The study was done through Motu Research and Victoria University of Wellington Te Herenga Waka.
The study also found that people who own their homes outright have stronger financial well-being than renters or mortgage-holders.
“Our findings show rising property prices can make some people feel better off while leaving others struggling,” said Motu senior fellow and Victoria University professor Arthur Grimes.
It used data from more than 80,000 households collected by Statistics NZ between 2006 and 2024. Between 2005 and 2021, a 142% “surge” in rents deepened inequalities, researchers said.
“If we want to support well-being for everyone, we need to look closely at how monetary and other policies affect house prices and rents,” Grimes said.
“Good policy can ensure prosperity supports everyone, no matter their housing situation.”
Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.
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