New Zealand's population growth will drive a rental crisis for generations to come if housing stock isn't monitored more efficiently, a new report warns.
Rental research: A more transparent and reliable measure of rental affordability, published on Saturday by the Child Poverty Action Group (CPAG), outlined how affordable rental housing had declined by between 1 and 5 percent over the past five years - while the population grew by 8 percent in the same period.
While previous research measured affordability by rents less than 30 percent of a household's income, this latest report "looks in detail at whether a household's income is sufficient to cover costs", author Greg Waite said.
"In response to unaffordable housing, we have seen ongoing adaption in the rise of shared housing, the increasing hours worked by primary carers of children, the decline in the number of children per family and the rise in intergenerational housing and childcare assistance," he said in a statement on Saturday. "Rising rents and falling home ownership signal that we need to do more than just adapt to market trends."
New Zealand's median weekly rental price was now $620, with a quarter of households spending more than 40 percent of their disposable income on housing costs.
A large driver behind the increases were fewer rentals on the market, experts have said.
"The ongoing failure to deliver affordable private rental makes a strong case to focus new spending on longer-term solutions such as social housing, incentives to build new affordable housing and shared equity rental, rather than short-term rent subsidies," said Waite, a former Queensland Department of Public Works policy analyst. "While the first objective of these benchmarks is to monitor whether the share of affordable rental is rising or falling, they can also be used to define targeted incentives for construction of low-cost homes by private, partnered or non-profit organisations."
Waite said the Government's ongoing focus needed to be on lifting social support as well as "expanded public debate and a new commitment to state funding and partnerships with communities and iwi".
"In June 2021, singles and couples receiving the Jobseeker benefit faced the largest weekly income shortfall at 37 percent and 36 percent of income respectively, with couple parents on the Jobseeker Benefit close behind with a weekly shortfall of 33 percent.
"These households need large increases in support payments ($157, $240 and $323 respectively) to afford the basic standard of living recommended by the 2019 Welfare Expert Advisory Group, whose 42 recommendations to overhaul the welfare system have largely been ignored by the Government."
Unless more is done, "future generations will be much worse off as unaffordable renting replaces affordable home ownership for more young families and more retirees", he said.
"Our current market-driven policies are steadily moving us towards a more difficult future where more and more families will be forced to adjust to unaffordable renting throughout their working lives and into retirement."
