Housing stocktake ‘sobering’

01 March 2018

A stocktake of the country’s housing sector, commissioned by Housing and Urban Development Minister Phil Twyford, and realesaed last month presents a “sobering picture of the devastating impacts of the housing crisis, particularly on children.” 

The stocktake ranges from homeownership and market renting, to state housing and homelessness, and the social cost of substandard housing. Mr Twyford said it highlights the increasing number of elderly facing housing-related poverty “because fewer and fewer are mortgage free and able to survive on Superannuation alone”.

The reports authors were economist Shamubeel Eaqub, housing academic Philippa Howden-Chapman and long-time community housing advocate Alan Johnson.

The review, which does not include official recommendations, came under fire from Property Institute chief executive Ashley Church who told landlords.co.nz that the original goals of the review appeared to have been hijacked by the issue of homelessness.

He said the housing crisis could only be fixed by a significant boost in supply – “not by piling more and more regulations onto private rental property providers”.

Reintroducing depreciation on new rental properties for the first 10 years and dropping the penalising of landlords would work to encourage investment in good rental stock, said Mr Church.

“Recognising that landlords are part of the solution, not the problem or the blight that they are currently made out to be, would go a long way to boosting rental property stock.”

And NZ Property Investors’ Federation executive officer Andrew King said providing rental property had become progressively more difficult in recent years, which was a key reason for the drop in rental stock.

“Increased regulation, higher costs, larger deposit requirements and a generally negative attitude towards the people who provide homes for tenants has led to some landlords exiting the industry,” said Mr King. “This leads to reduced availability of homes for tenants and to higher rental prices as demand exceeds supply.”

But he said that even without new regulations and cost increases, it was difficult to see how the required increase in rental property supply could be achieved.

Rental market facts and figures from the stocktake document include:

  • 70% of new households formed over the past decade are renters.
  • 574,000 households in New Zealand are renters.
  • 190,000 of private tenant houses receive the Accommodation Supplement.
  • There were 6,182 households in need of a state house in the December 2017 quarter.
  • Of households paying more than 40% of their income in housing, 60-65% are tenants, despite renters making up 36% of households overall.
  • The proportion of children younger than 15 living in rental dwellings increased by 65% between 1986-2013, from 26.1% to 43.1%.
  • From 2012-17 rents for three-bedroom homes rose 25% while wages rose just 14%.
  • Over the last decade the number of dwellings owned or managed by Housing NZ peaked in mid-2011 at 69,717 units, then fell to 62,917 units in June 2017.
  • A recent BRANZ report found that 36% of Auckland tenants who moved in the past two years did so because the house they were renting had been sold.
  • 32% of rental properties are being ‘poorly maintained’ compared to 14% of owner-occupied properties.

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