Rental research: a more transparent and reliable measure of rental affordability

Everyone deserves a warm, safe, dry home.

For too long politicians have taken a hands-off approach to the housing market and as a result Aotearoa New Zealand is the least affordable place to rent in the OECD contributing to unacceptable child poverty rates.

In addition our population is growing faster than the share of affordable homes.

An important first step in addressing the shortfall in affordable housing stock is measuring and monitoring the supply over time.

This series of papers provides new analysis of rental housing affordability to provide a more complete picture of today’s private rental market.

Part one explains the approach behind the research and compares rental affordability for different household types, incomes and regions.

Part two measures changes in the supply of affordable private rental for three income levels — median wages, low wages and benefit incomes.

Part three looks at systemic limitations in our income support system, problems which are often overlooked.

Over the five years to 2023 the affordable share of private rental stock has mostly decreased, despite population growth of 8 percent over the same period.

The most dramatic loss of affordable rental stock is in areas which traditionally had the lowest rents. For example, the share of rental properties in traditionally cheaper suburbs which are affordable on low wages fell from 75 percent of all stock to 55 percent in just five years to 2023.

Dramatic changes like this can result when older, cheaper homes are redeveloped, while new building targets higher returns at the top of the market. Standard headline measures like median rents often don’t tell the whole story.

This analysis of changes in rental supply is freely available to all with an interest in addressing rental affordability and its impact on child poverty.

CPAG encourages policy makers in central and local government to use this to guide future planning.

The benchmarks defined to measure affordable rent can also be used to target incentives which encourage construction of more new affordable rental.

Our current market-driven policies are steadily moving us towards a more difficult future, where more and more families will be forced into unaffordable renting throughout their working lives and into retirement. 

To create more affordable rental homes, we will need an expanded public debate and a new commitment to state funding and partnerships with communities and iwi.