Latest results for the Housing Affordability Measure (HAM)

What is the Housing Affordability Measure for potential first home buyers?
What is the Housing Affordability Measure for renters?

 National

[images] National results graph

Figure 1: Share of first home buyer (HAM Buy) and renter (HAM Rent) households with below average income after housing costs, national-level (March 2003 to March 2017)

At a national level, the share of potential first home buyer households with below average incomes after housing costs increased from 77% in March 2016 to 80% in March 2017.

Nationally, the share of renter households with below average incomes after housing costs remained unchanged at 61% between March 2016 and March 2017.

Auckland City

[image] Auckland results graph

Figure 2: Share of potential first home buyer (HAM Buy) and renter (HAM Rent) households with below average incomes after housing costs, Auckland City (March 2003 to March 2017)

The share of potential first home buyer households in Auckland City with below average incomes after housing costs increased from 83% in March 2016 to 84% in March 2017.

The share of renter households in Auckland City with below average incomes after housing costs decreased from 55% in March 2016 to 54% in March 2017.

Christchurch City

[image] Christchurch results graph

Figure 3: Share of potential first home buyer (HAM Buy) and renter (HAM Rent) households with below average incomes after housing costs, Christchurch City (March 2003 to March 2017)

The share of potential first home buyer households in Christchurch City with below average incomes after housings costs increased from 72% in March 2016 to 74% in March 2017.

The share of renter households in Christchurch City with below average incomes after housing costs increased from 54% to 56% between March 2016 and March 2017.

Wellington City

[image] Wellington results graph

Figure 4: Share of potential first home buyer (HAM Buy) and renter (HAM Rent) households with below average incomes after housing costs, Wellington City (March 2003 to March 2017)

The share of potential first home buyer households in Wellington City with below average incomes after housing costs increased from 58% in March 2016 to 63% in March 2017.

The share of renter households in Wellington City with below average incomes after housing costs remained unchanged at 44% between March 2016 and March 2017.

What does the HAM measure?

The HAM does not set a level at which housing is or is not affordable. Determining affordability depends on each household’s circumstances and expectations of what qualifies as a socially accepted standard of living. This is a challenge common to all efforts at measuring material hardship1.

The HAM uses household-level data to compare the income after housing costs of renters and potential first home buyers to income after housing costs for the average New Zealand household in June 2013.

In dollar amounts, income after housing costs for the average New Zealand household is $662 per week for a one-person household. This amount is adjusted for household size. The more people that live in a household, the more income it must have left after housing costs in order to have a comparable standard of living. The following table summarises how much income after housing costs the average household has in different situations, both in weekly and annual terms:

Household Weekly income after housing costs Annual income after housing costs
Single adult $662 $34,436
Single parent, one child $861 $44,766
Single parent, two children $1,060 $55,097
 
Couple, no children $993 $51,654
Couple, one child $1,192 $61,984
Couple, two children $1,391 $72,315
 
Each extra adult +$331 +$17,218
Each extra child +$199 +$10,331

Definition of average income after housing costs, by household type

These values are also adjusted for inflation. The above values apply for June 2013 – to determine the values for other time periods, you can use the Reserve Bank’s Inflation Calculator.

Files for download

 

1 A useful discussion of the issues with measuring material hardship can be found in Appendix 6 of Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2015 by the Ministry of Social Development.