by Miriam Bell
It’s widely accepted that New Zealand has a housing affordability problem and yet the country has no official tool to measure housing affordability.
Back in 2012, at Cabinet’s behest, the Ministry of Business Innovation and Employment (MBIE) and Statistics New Zealand started work on the creation of a Housing Affordability Measure (HAM).
The measure is intended to show whether housing is unaffordable for both renters and first home buyers in specific areas and at specific, different income bands around New Zealand.
It will be based on actual rents and mortgage payments made by individual households - not just averages - and will use data from tax returns, rents from bonds registered with MBIE, Reserve Bank interest rates, and Core Logic sales data.
Within the measure, there will be two components. They will look at whether a renting household can afford to continue to rent and whether a renting household can afford to buy.
But the release date of the measure has now been delayed several times, mostly recently in February this year, and there is no word as to when it might make it into the public eye.
According to sources, any such measure – which is not likely to bear good news on the affordability front – is likely to be too politically sensitive to release before the election in September.
Now, questions are being asked as to why the measure has been delayed for so long.
Labour Party housing spokesperson Phil Twyford said the situation would be farcical if it wasn’t such an important issue.
“It might’ve seemed like a good idea at the time, but after at least two years of delays and faced with an ever-deepening housing crisis it looks like the Minister is scrambling to suppress the HAM.
“The officials are right: New Zealand needs a credible affordable housing measure. The HAM makes a lot of sense and it appears it won’t see the light of day during an election year.”
Twyford said the government was suppressing the facts because they show they have not dealt with the problems involved in the housing crisis effectively
Rising housing costs have eaten the benefits of any rise in incomes last year for Kiwi families, he said.
“Analysis by the Parliamentary Library shows that households spent $3 billion more on housing in 2016 compared to 2015.
“Last year the average household’s income rose $32 a week, while average housing costs rose by $30 a week.”
This means that housing affordability around New Zealand, and particularly in Auckland, continues to be stretched.
But, as there is no official measure relating to it, it is hard to determine which areas are unaffordable and when they have become so.
Economic commentator Shamubeel Eaqub told media the measure would be useful, but wouldn’t change the housing narrative – which is bad when it comes to affordability.
Read more:
Auckland no longer least affordable
SuperCity affordability slides further
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