Significant Shift in Housing Trends
Property company DTZ NZ has completed a new report, on NZ's housing market, for the Centre for Housing Research. Key changes in the structure of the NZ housing market since the early 1980s include:
- a significant reduction in government's direct involvement in the housing market. It is now restricted to: being a housing provider of last resort to those most in need; and being a creator and manager of the institutional framework within which the housing market operates;
- rapid escalation in housing values in the main centres compared with the rest of the country;
- escalation of household housing costs as a percentage of income;
- decline in home ownership affordability to the extent that some groups have not been able to maintain ownership goals;
- increase in the number of private-rented dwellings;
- changes in the social housing sector - stock numbers and delivery;
- changes in the regulatory framework for planning and building;
- financial market deregulation;
- intensification of development, particularly in Auckland and Wellington; and
- changes in household composition, which is likely to impact on the demand for the physical housing stock in the future.
Specific findings include:
- There has been a decline in home ownership (in the last 20 years the rate of private home ownership had declined from 71.4 percent to 68 percent of all households).
- The number of private-rented households has increased from 142,068 in 1981 to 264,501 in 2001.
- Since 1987, total costs for renters had climbed 166 percent, but their average income had only gone up by 59 percent (also, between 1981 and 2001, the proportion of household income paid out as rent doubled).
- Between 1981 and 2001, European households were the only ethic group to be renting fewer homes, dropping from 82.8 percent of the market to 74.5 percent (in contrast, Asian renters' share of the market went from 1.5 to 6.3 percent, Maori households from 11.9 to 17 percent, and Pacific Islanders from 3 to 4.2 percent).
- In terms of Housing NZ houses, the picture was a bit different (Pacific peoples rented 8.4 percent of HNZ houses in 1981, but 22.9 percent in 2001; and Maori households' share went from 21.9 percent to 28.2 percent over the same period).
- Renters in the private rental market had grown older, with the 30-49 year-old age group dominating the market and renting just under half of all private-rented homes.
- Single-parent households' share of private-rented households increased from 6.8 percent in 1981 to 15.5 percent in 2001.
Other findings include:
- Fewer people of all ethnic groups are buying houses, but Maori, Asian and Pacific Islander rates have dropped more sharply than European rates.
- Specifically, from 1981 to 2001: European rates have dropped from 74.2 to 71.9 percent, Maori have dropped from 47.9 to 44 percent, Asian from 64.8 to 58.8 percent - although a lot of that is due to an increase in Asian immigration and student numbers - and Pacific peoples has gone from 38.8 to 35.5 percent.
- When adjusted for inflation, the cost of building a house was 24 percent higher now than it had been in the early 1980s.
- In 1990, houses cost an average $97,600 to build, or $703 a square metre. By 2003 the cost was $194,000 or $935 a square metre.
- The average size of new homes in the 1970s was 146m2, 149m2 in the 1980s, 173m2 in the 1990s and more than 200m2 since the turn of the century. The increase in house size appeared to be due to consumer preference rather than increased family size or cheaper materials.
- Apartment sizes changed little during the 1990s, but the costs of building an apartment increased by 72 percent.
- Section values increased by 580 percent between 1982 and 2002, or 10.1 percent per year (adjusted for inflation, that represented an increase of 174 percent, or 5.2 percent per year).
- In terms of house building, the fastest growing areas are Bay of Plenty, Waikato, Northland, Auckland and Nelson-Marlborough.
The report can be downloaded from http://www.hnzc.co.nz/chr/ |
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