Household Income Up Over 40% in Last 10 Years
Household income up more than 40 percent in last 10 years
Average annual household income has risen more than 40 percent since 2007, increasing at twice the rate of inflation, Stats NZ said today. Over the same period, average annual housing costs increased just over 50 percent.
Since 2007, average annual household income is up nearly $30,000 (42.0 percent), to reach $98,621 (before tax) in 2017. Over the same 10 years, average annual housing costs increased from $10,658 to $16,037 (up 50.5 percent), according to the latest household income and housing-cost statistics. Inflation, as measured by the consumers price index, increased 20.2 percent.
Household income includes any income from wages and salaries, self-employment, investments, government benefits, and superannuation. Housing costs include rent and mortgages, property rates, and building-related insurance.
“Despite increases in both household income and housing costs, the ratio of housing costs to household income has not changed significantly from a decade ago,” labour and income statistics manager Sean Broughton said.
For the year ended June 2017, households spent an average of $16.40 of every $100 of their household income on housing costs, slightly more than the $15.40 they spent a decade ago.
Lower interest rates help keep housing costs down
In the year ended June 2017, average weekly housing costs were $318.50, almost unchanged from 2016. Lower mortgage interest rates helped to largely dampen any increases in housing costs.
"Housing costs have been held in check by lower mortgage interest rates, which affected both floating and two-year fixed mortgages," Mr Broughton said.
Average mortgage interest payments were significantly lower for the June 2017 year (down 11.6 percent to $250.80 a week), falling from $283.70 a week for the year ended June 2016.
Renters were almost three times as likely as home owners to spend 40 percent or more of their household income on housing costs. For the June 2017 year, about one in five (20.8 percent) renting households spent 40 percent or more of their household income on rent and other housing costs. In contrast, fewer than one in ten (7.8 percent) of people who owned, or partly owned, their own home spent 40 percent or more of their household income on housing costs.