CTU media release
26 November 2009
Rising rental costs paint a grim picture for the have-nots
The CTU is calling for a major boost to investment in low-cost housing.
Figures released today in the Household Economic Survey (Income) show that despite rising average incomes, accommodation costs are still really hurting low and middle-income families.
“A particular reason for this is rent,” said CTU Economist Bill Rosenberg. “Those households with lower income are more likely to rent than own. So, while reduced interest rates have seen the costs of servicing a mortgage fall, median expenditure on rent has gone up by 9.5 per cent.”
“Now is just the right time to significantly increase the funding for low-cost rental housing, through Housing New Zealand and local government.
Nineteen per cent of renters, as opposed to only six percent of homeowners, spend more than 40 per cent of their household income on housing – that’s over 100,000 households.
With one in four households paying at least a quarter of their income to housing (either rent or mortgage) it’s still hard going in the bottom half of the labour market.
“Since the data for this survey was collected, mortgage costs have also begun to rise again,” added Rosenberg. “Home owners will soon be hurting as much as those renting. The Government should be looking at options such as shared equity and low-cost loans for new houses.”