Housing affordability for renters and owners: International comparisons

Housing affordability for renters and owners: Inte…
01 Nov 2021


This report:

  • shows where New Zealand ranks internationally on selected aspects of housing affordability for those already in their own homes or renting, using a high housing costs relative to household income measure, applied to lower-income households
  • provides international comparisons of housing costs as a proportion of income for owners and renters, going beyond lower-income households and covering the whole population
  • outlines the different approaches taken to measuring housing costs relative to income (for international comparisons), and illustrates how these different approaches and the inclusion or exclusion of different sub-groups in the analysis can impact on the overall picture produced.


The analysis uses data from Stats NZ’s Household Economic Survey (HES) to produce two sets of comparisons:

  • It first re-visits and updates some housing affordability information first published by the OECD in 2018. The OECD report limits housing costs to mortgage and rent payments and uses the ‘more-than-40%’ outgoings-to-income (OTI) threshold. The analysis excludes those who own outright (no mortgage). It reports country rankings for households in the lowest income quintile, but looks also at households across the income spectrum, breaking down the quintile information by tenure. This enables comparisons to be reported for housing (un)affordability as usually understood (low-income households spending ‘too much’ on accommodation), as well as cross-country comparisons of relatively high spending on accommodation for all households.
  • The report also applies Eurostat’s Housing Cost Overburden (HCO) methodology to HES data and locates New Zealand in the published tables to compare with European nations. Their HCO statistics also use a 40% threshold when comparing housing costs and household income, but the Eurostat HCO analysis is different from the OECD OTI analysis on four counts:
    • The Eurostat approach looks at net housing costs (gross less any subsidy or housing assistance (such as our Accommodation Supplement)) and compares that with household income excluding housing assistance. The OECD approach uses gross housing costs and includes housing support in household income.
    • Eurostat uses a broader definition of housing costs including rates, insurance and utilities, but it excludes mortgage principal.
    • Unlike the OECD report, the EU income quintile information is not broken down further by tenure or other categories of interest, but it does give age-group analysis overall.
    • Eurostat’s reporting uses all households in their HCO estimates – including those without a mortgage. Country rankings are therefore impacted by the proportion in each country who are outright owners, not just by rent and mortgage repayments.


Access to the HES data was provided by Stats NZ under conditions designed to meet the confidentiality provisions of the Statistics Act 1975. The results presented in this analysis are the work of the Ministry of Social Development except where otherwise stated.

The original New Zealand material was provided to the OECD by Stats NZ. See Appendix 2 for a discussion of the methodology that was used then and what is used in this report.

Key Results

New Zealand has had the largest rise in house prices (in real terms) in the OECD, 2000 to 2020

New Zealand has a long-run trend of increasing housing (un)affordability for low-income households

  • This trend has been sustained for those with housing costs > 50% of income even when the less stringent measures (>30%, >40%) showed signs of plateauing in more recent years.
  • The chart (from the Incomes Report) shows trends for low-income under-65 households with housing costs greater than 30%, 40% and 50% of HH income. Low-income households here refers to households with income in the bottom quintile (Q1).

60% of low-income private renters (Q1) are in households that spend more than 40% of their income on rent, the highest rate in the OECD

17% of those living in low-income mortgaged households (Q2) spend more than 40% of their income on the mortgage, the highest rate in the OECD

14% of all households paying a mortgage or renting spend more than 40% of their income on housing costs the highest rate in the OECD after Iceland, and the same as Chile and Greece

On the EU approach (which includes those households owning outright), NZ children overall are more than twice as likely as older NZers (65+) to be living in households spending more than 40% of their income on housing costs (9% v 4%), higher than almost all European countries

The relativity between children and those aged 65+ varies considerably across European countries. This means that it is not simply a life-stage phenomenon; the relativities can be impacted by policy differences and cultural norms and expectations.

Page last modified: 04 Aug 2023