Renting more affordable - HAM
Wednesday 10 May 2017
It is more affordable to rent a property than it is to buy a first property, the Government’s new Housing Affordability Measure (HAM) shows.
By Miriam Bell
New Zealand’s affordability issues have long been compounded by the fact that there has been no official way to assess them.
Plans for the HAM were first laid back in 2012, but there have been a number of delays with its development which have led to disquiet about its arrival.
However, today the Ministry of Business Innovation and Employment (MBIE) finally released the new HAM – and it shows that it is more affordable to rent than it is to buy a first home.
MBIE deputy chief executive building, resources and markets Chris Bunny said that the measure was a new approach to measuring housing affordability.
The HAM uses household-level data from the Statistics New Zealand Integrated Data Infrastructure (IDI) to provide a more accurate picture of how much New Zealanders spend on housing.
It also tracks whether housing is becoming more or less affordable over time for both renters and aspiring first home buyers.
Bunny said the measure provides a picture of shifts in affordability, broken down by local council and by ward in Auckland.
"It will provide important information to support Government and other stakeholder decisions and policies on housing."
Alongside the announcement that the HAM is up and running, MBIE also released the results of the first measure which covers the period March 2003 to June 2015.
The results show that housing was more affordable for renters than for first home buyers.
Further, they confirm that affordability for first home buyers in the Auckland market has worsened since 2011.
In contrast, affordability for first home buyers in Wellington has remained stable and the most affordable of the three big centres, while affordability for first home buyers in Christchurch has improved.
Not surprisingly, the results also show that Auckland was the least-affordable region for housing for renters, as well as first home buyers.
Housing affordability for Auckland renters was worse in 2015 than it was before the global financial crisis, but has improved since 2013.
Bunny said today’s release was part of an “experimental statistical series”.
This means the measure will continue to be refined to ensure it remains fit-for-purpose and that the results are robust and meaningful, he said.
New releases are planned for quarterly intervals.
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