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Homeownershipin New Zealand:Trends over time and generations
Alan Bentley, Senior AnalystNew Zealand Population ConferenceWellington, 20 June 2019
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Why it matters
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$39,000
$408,000
$845,000
Not owned
Own, with mortgage
Own
Median household net worth 2018, by tenure
Homeowners typically twenty-times wealthier
Owner-occupied dwellings held in family trust not shown
Source: Stats NZ Household Economic Survey 2017-18
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0
100
200
300
15-24 25-34 35-44 45-54 55-64 65-74 75+Age group, years
financial assetspropertydebt
Median household assets and liabilities 2018, by age group $ thousands
Property a big part of wealth accumulation
Source: Stats NZ Household Economic Survey 2017-18
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20%
30%
40%
Fair or poor Good Very good Excellent
owner-occupiednot owner-occupied
Self-rated general health by tenure
Homeowners report better health
Source: Stats NZ General Social Survey 2016
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Cold Mould
Always or
o�en
Sometimes Never Major Minor None0%
20%
40%
60%
owner-occupied not owner-occupied
Proportion of households reporting mould and cold problems
Homeowners' homes have less mould and cold
Mould problem: House or flat with dampness or mould problemCold problem: In winter, house or flat colder than desired
Source: Stats NZ General Social Survey 2016
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15%
20%
25%
30%
6 or less
7 8 9 10 Completely
satisfiedReported life satisfaction (out of 10)
owner-occupied not owner-occupied
69% of homeowners reported a life satisfaction score of 8 or more, compared with 56% of non-homeowners
Homeowners appear happiest with their lot
Source: Stats NZ General Social Survey 2016
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Context
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50%
65%
74%
1916 1936 1954 1991 2013
Proportion of dwellings owned by their occupants
Homeownership rate lowest since 1954
Source: Stats NZ, Censuses of Population and Dwellings
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Generations
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36%
50%
88%
30 40 50 60 70age
2018Homeownership rates increase with age
People who own: includes ownership by household, own with mortgage, and since 2007, in a family trust excludes people living with parents
Source: Stats NZ, Household Economic Surveys 1988-2018
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1944-19481954-19581964-1968
1974-1978
1984-1988
10%
50%
80%
20 30 40 50 60 70age
Trends in homeownership by birth cohort
Majority of today's 70-74 year-olds have enjoyed homeownership since their 40s
LOESS trend lines
People who own: includes ownership by household, own with mortgage, and since 2007, in a family trust excludes people living with parents
Birth cohorts shown if we have observations at that age for all five birth years in that cohort
Source: Stats NZ, Household Economic Surveys 1988-2018
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1944-1948
1934-1938
1924-1928
1954-1958
1964-1968 1974-19780%
20%
50%
80%
20 30 40 50 60 70age
Trends in full homeownership by birth cohort
Many of today's 70-74 year olds paid off their mortgage in their 40s and 50s
LOESS trend lines
People who own: includes ownership by household, without mortgage, and since 2007, in a family trust excludes people living with parents
Birth cohorts shown if we have observations at that age for all five birth years in that cohort
Source: Stats NZ, Household Economic Surveys 1988-2018
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age 25 to 34
age 35 to 44
age 45 to 54 age 55 to 64 age 65 to 74
35%
50%
65%
90%
1988 1995 2000 2007 2014 2018Year to June
Proportion of people who own by age and yearDeclining proportion of young home-owners
LOESS trend lines
People who own: includes ownership by household, own with mortgage, and since 2007, in a family trust excludes people living with parents
Source: Stats NZ, Household Economic Surveys 1988-2018
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age 30 to 39
age 40 to 49
age 50 to 59
age 60 to 69
age 70+
5%
50%
80%
1988 1995 2000 2007 2014 2018Year to June
Proportion of people who fully-own by age and yearFull homeownership becoming less common
LOESS trend lines
People who own: includes full ownership by household, and since 2007, in a family trust excludes people living with parents
Source: Stats NZ, Household Economic Surveys 1988-2018
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25 to 34
<5% 25% >50%0%
5%
10%
15%
Household expenditure on housing costs
Prop
ortio
n of
peo
ple
year1988
Distribution of homeowners spending on housing costs, by age and yearHousing becoming a bigger cost
Source: Stats NZ, Household Economic Surveys 1988-2018
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25 to 34
<5% 25% >50%0%
5%
10%
15%
Household expenditure on housing costs
Prop
ortio
n of
peo
ple
year19882016
Distribution of homeowners spending on housing costs, by age and yearHousing becoming a bigger cost
Source: Stats NZ, Household Economic Surveys 1988-2018
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55 to 64 65 to 74 75+
25 to 34 35 to 44 45 to 54
<5% 25% >50%<5% 25% >50%<5% 25% >50%
0%10%20%30%40%
0%10%20%30%40%
Household expenditure on housing costs
Prop
ortio
n of
peo
ple
year1988
Distribution of homeowners spending on housing costs, by age and yearHousing becoming a bigger cost
Source: Stats NZ, Household Economic Surveys 1988-2018
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55 to 64 65 to 74 75+
25 to 34 35 to 44 45 to 54
<5% 25% >50%<5% 25% >50%<5% 25% >50%
0%10%20%30%40%
0%10%20%30%40%
Household expenditure on housing costs
Prop
ortio
n of
peo
ple
year19882016
Distribution of homeowners spending on housing costs, by age and yearHousing becoming a bigger cost
Source: Stats NZ, Household Economic Surveys 1988-2018
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Capital value Income
1992 2000 2007 2018 1992 2000 2007 20180%
100%
200%
300%
400%
25 to 34 35 to 44 45 to 54 55 to 64 65 to 74
Change in homeowners' median capital value and median income, by age
Income growth has not kept pace with value growth
LOESS trend lines
Source: Stats NZ, Household Economic Surveys 1988-2018
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age 45 to 54
age 55 to 64
age 65 to 74
age 35 to 44 age 25 to 34
2
3
4
6
7
1992 2000 2007 2018
Homeowners' median income to capital value ratioRising value-to-income ratios
LOESS trend lines
Source: Stats NZ, Household Economic Surveys 1988-2018
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25 to 34
<2 40%
10%
20%
30%
40%
50%
Income to capital value ratio
Perc
ent o
f hou
seho
lds
year1992
Distribution of capital-value to income ratioCapital values rising faster than income
Source: Stats NZ, Household Economic Surveys 1988-2018
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25 to 34
<2 4 10 >200%
10%
20%
30%
40%
50%
Income to capital value ratio
Perc
ent o
f hou
seho
lds
year19922018
Distribution of capital-value to income ratioCapital values rising faster than income
Source: Stats NZ, Household Economic Surveys 1988-2018
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55 to 64 65 to 74 75+
25 to 34 35 to 44 45 to 54
<2 4 10 >20 <2 4 10 >20 <2 4 10 >20
0%10%20%30%40%50%
0%10%20%30%40%50%
Income to capital value ratio
Perc
ent o
f hou
seho
lds
year1992
Distribution of capital-value to income ratioCapital values rising faster than income
Source: Stats NZ, Household Economic Surveys 1988-2018
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55 to 64 65 to 74 75+
25 to 34 35 to 44 45 to 54
<2 4 10 >20 <2 4 10 >20 <2 4 10 >20
0%10%20%30%40%50%
0%10%20%30%40%50%
Income to capital value ratio
Perc
ent o
f hou
seho
lds
year19922018
Distribution of capital-value to income ratioCapital values rising faster than income
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 19940%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth a generation ago
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 19950%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 19960%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 19970%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 19980%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 20010%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 20040%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 20070%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 20080%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 20090%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 20100%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 2004 20110%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 2004 20120%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 2004 20130%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 2004 20140%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
![Page 41: Homeownership in New Zealand...New Zealand Population Conference Alan Bentley , Senior Analyst. Wellington, 20 June 2019. Why it matters. $39,000 $408,000 $845,000. Not owned Own,](https://reader036.vdocuments.mx/reader036/viewer/2022062603/5f6bcc758ba1d52d7139849a/html5/thumbnails/41.jpg)
less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 2004 20150%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
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less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 2004 20160%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
![Page 43: Homeownership in New Zealand...New Zealand Population Conference Alan Bentley , Senior Analyst. Wellington, 20 June 2019. Why it matters. $39,000 $408,000 $845,000. Not owned Own,](https://reader036.vdocuments.mx/reader036/viewer/2022062603/5f6bcc758ba1d52d7139849a/html5/thumbnails/43.jpg)
less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 2004 20170%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
![Page 44: Homeownership in New Zealand...New Zealand Population Conference Alan Bentley , Senior Analyst. Wellington, 20 June 2019. Why it matters. $39,000 $408,000 $845,000. Not owned Own,](https://reader036.vdocuments.mx/reader036/viewer/2022062603/5f6bcc758ba1d52d7139849a/html5/thumbnails/44.jpg)
less than 20
20 to 39
40 to 59
60+
Housing wealth
1992 2004 20180%
25%
50%
75%
100%
year
Share of housing wealth by age
Housing wealth has been transfered to older generations
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
![Page 45: Homeownership in New Zealand...New Zealand Population Conference Alan Bentley , Senior Analyst. Wellington, 20 June 2019. Why it matters. $39,000 $408,000 $845,000. Not owned Own,](https://reader036.vdocuments.mx/reader036/viewer/2022062603/5f6bcc758ba1d52d7139849a/html5/thumbnails/45.jpg)
less than 20
20 to 39
40 to 59
60+
less than 20
20 to 39
40 to 59
60+
Housing wealth People
1992 2004 2018 1992 2004 20180%
25%
50%
75%
100%
year
Share of housing wealth by age (population age-structure shown for comparison)
Housing wealth has been transfered to older generations
Housing wealth: Owner-occupied housing wealth
Source: Stats NZ, Household Economic Surveys 1988-2018
![Page 46: Homeownership in New Zealand...New Zealand Population Conference Alan Bentley , Senior Analyst. Wellington, 20 June 2019. Why it matters. $39,000 $408,000 $845,000. Not owned Own,](https://reader036.vdocuments.mx/reader036/viewer/2022062603/5f6bcc758ba1d52d7139849a/html5/thumbnails/46.jpg)
And for the next generation?
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Summary
Why homeownership matters
Health, wealth & happiness
Trends
Decline in homeownership rate, over past 3-decades
• majority of today’s pensioners have enjoyed homeownership since their 40s(many paying down their mortgage during their 40s and 50s)
• actute decline for young adults• housing costs becoming a bigger share of expenditure, at all ages• capital values rising faster than income
Consequences
Transfer of housing wealth from young-adults to retirees
![Page 48: Homeownership in New Zealand...New Zealand Population Conference Alan Bentley , Senior Analyst. Wellington, 20 June 2019. Why it matters. $39,000 $408,000 $845,000. Not owned Own,](https://reader036.vdocuments.mx/reader036/viewer/2022062603/5f6bcc758ba1d52d7139849a/html5/thumbnails/48.jpg)
Supplementary slides
![Page 49: Homeownership in New Zealand...New Zealand Population Conference Alan Bentley , Senior Analyst. Wellington, 20 June 2019. Why it matters. $39,000 $408,000 $845,000. Not owned Own,](https://reader036.vdocuments.mx/reader036/viewer/2022062603/5f6bcc758ba1d52d7139849a/html5/thumbnails/49.jpg)
1992
1995
1998
2004 2001
1992 1995
1998
2001
2004
25 to 34 35 to 44
0 to 2 2 to 4 4 to 6 6+ 0 to 2 2 to 4 4 to 6 6+15%
55%
75%
85%
Income to capital value ratio
Homeownership by age, year, and income-to-value ratioLess young homeowners at each value-to-income ratio
Source: Stats NZ, Household Economic Surveys 1988-2018