Housing Affordability Measure

Using household-level data from the Statistics New Zealand Integrated Data Infrastructure (IDI), The Housing Affordability Measure is a new approach to measuring housing affordability. First released on 10 May 2017 this measure provides a picture of shifts in affordability, broken down by region and territorial authority (and by ward in Auckland).

In August 2012, as part of a review of the Official Statistics System, Cabinet agreed that work should be undertaken towards the creation of a Tier 1 official statistic on housing affordability. The Housing Affordability Measure (HAM) is an experimental statistical series that measures household income after paying for housing costs for two subsets of the population: potential first home buyers population and renters.

Affordability is calculated by using data from Statistics New Zealand’s Integrated Data Infrastructure to measure income at the household level. Housing costs – the rent lodged on tenancy bond forms for renters and mortgage payments, rates and insurance for potential first home buyers – are then subtracted. The remaining household income is then adjusted to reflect the fact that larger households generally need larger incomes.

As the lead government agency on housing policy, the Ministry of Business, Innovation and Employment (MBIE) assumed the responsibility for developing these two indicators.

First release of HAM

The HAM’s first set of results, up to June 2015, presents key findings about housing affordability trends at a national level and for the three most populous regions of New Zealand.

Read the first set of results.

Changes to HAM version 1.1

HAM is experimental and subject to change.

As HAM is still an experimental series, MBIE will be making regular adjustments to the method used to create HAM, as well as how it is presented. Additionally, the data we use to produce HAM is constantly being refined and improved which could also result in changes to the series over time.

Because MBIE updates the full back series any time a change is made, newly-released HAM results may differ slightly from previous releases.

Users should not combine data from different HAM releases. If you have any analysis that you want to update from the previous version, we recommend downloading the most recent tables.

Since HAM data from different releases are not necessarily compatible, MBIE has given a version number to each release. For example, the HAM released in May 2017 was version 1.0 and the HAM released in August 2017 was version 1.1.

Changes from version 1.0

Method Changes

A minor adjustment was made to the code used to calculate HAM.

An issue that resulted in the number of incomes in some households being underestimated has been addressed. This led to HAM overestimating the share of households with below-average income after housing costs. This means that HAM v1.1 reports slightly better housing affordability than HAM v1.0, although the overall trends are unchanged:

[image] Changes to the HAM

Comparison of HAM version 1.0 and HAM version 1.1, National data.

Presentation Changes

MBIE has clarified what each HAM value represents. Instead of describing HAM as reporting on “the share of households below the 2013 national affordability benchmark”, we are instead describing HAM as reporting on “the share of households with below-average income after housing costs”. We have also released an infographic for buyers and renters to explain how HAM is calculated.

In addition to the primary HAM series, MBIE has released some alternate measures of affordability to provide additional context on housing affordability. These include:

 

We are interested in your feedback

Please email housinginfo@mbie.govt.nz if you have any questions or comments relating to HAM.