March 4th, 2025

Low-income households struggle as NZ housing costs soar

One-third of poorest Kiwis spending over 40% of income on housing amid rising costs and interest rates

The breakdown of the consents showed a 0.5 percent decrease in stand-alone houses and a more significant 10 percent decline in multi-unit homes, which includes townhouses, apartments, retirement village units, and flats.
The breakdown of the consents showed a 0.5 percent decrease in stand-alone houses and a more significant 10 percent decline in multi-unit homes, which includes townhouses, apartments, retirement village units, and flats.

One-third of low-income households in New Zealand are spending more than 40% of their income on housing costs, according to new data released by Stats NZ.

The figures for the year ended June 2024 show that approximately 31% of households in the lowest two income quintiles allocated 40% or more of their income to housing, highlighting a growing affordability crisis.

  • Across all households, nearly one in five (19.7%) spent 40% or more on housing costs, up from 18.2% the previous year. Households now spend an average of $22.20 per $100 of income on housing, an increase from $20.80 in 2019.

The pressure is particularly acute for renters, with 28.4% of non-homeowners spending more than 40% of their disposable income on housing costs. Average weekly rent payments jumped 9% from $427.10 in 2023 to $465.50 in 2024.

  • Homeowners are not immune to the pressure, with mortgage payments rising 8.7% from the previous year. Interest payments rose dramatically by 35.8%, while principal repayments fell by 17.8%, suggesting homeowners are prioritising interest payments.

The housing cost strain is contributing to broader financial stress. More than one in three households (38.2%) reported their income was "not enough" or "only just enough" to meet everyday needs, a figure that has increased over the past two years.

  • The data also reveals that 9.4% of households are in material hardship, lacking six or more of 17 essential items such as regular doctor's visits, fresh fruit and vegetables, and adequate heating.

These findings come as the overall cost of living increased by 5.4% for the average New Zealand household in the 12 months to June 2024, driven primarily by interest payments, transport costs and rent.