Increase in housing costs outpaces increase in household income
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Hawke’s Bay
Spending on housing is growing at a faster rate than incomes, Statistics New Zealand said today. And people are spending more of their money paying off their mortgage principal, rather than just interest.
The latest Household Economic Survey (Income) shows average annual household income rose 9.1 percent in the two years to June 2014, from $81,227 to $88,579. (See graph below)
In the same period, average household weekly spending on housing costs rose 11.1 percent, from $256 to $284.
“The increase in housing costs was largely due to higher mortgage and rent payments, as well as an increase in property rates," labour market and household manager Diane Ramsay said.
“A really interesting shift we’ve seen is that a bigger proportion of mortgage spending is going on repaying the principal than on covering the interest payments.”
The average weekly mortgage payment was up from $357 in the year ended June 2012 to $389 in 2014. Average weekly rent payments rose from $273 to $290.
The changes in weekly housing-cost spending and annual household income resulted in an increase in the housing-costs-to-income ratio, which was 16.3 percent for the year ended 30 June 2014. This means that, on average, 16.3 percent of household income was spent on housing costs such as mortgages, rent, rates, and building-related insurance.
The Household Economic Survey (Income) is a shortened version of the three-yearly full Household Economic Survey, and was last done in 2011/12.
RAW DATA: Household Economic Survey - Income (PDF)
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Increase in housing costs outpaces increase in household income
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