Rent/HH Income

1998 to 2019, Rent is Always 22-25% of Household Income (excl Auckland)

Over the last 20 years, rents* have remained a constant proportion of household income**. This suggests a relationship, and realistically that is what you would expect, renting households will tend to find a rental that suits their total net income including wages, benefits as well as say interest. If a household income increases more than rents, then many tenants will seek a better standard of house at a higher price.

* Rents = geometric mean rent as published by MBIEwebsite every month. I calculate the calendar year average of the monthly published rents.

** Household Income = Stats Publish the sum of Wage and salary + "Government transfers” or benefits each year. Income is published annually. I exclude Self Employed income which may impact the results a little because some renters are self employed, but to include it would impact the results severely.

This chart measures affordability of housing from a renters point of view.

For the rental market, affordability is simply how much of your household income is going on rent. A study of this percentage using public data from MBIE and Stats has some surprising insights over 21 years.

Notice two key features of this chart:

  1. The proportion of rent has remained almost constant over 20 years for all regions with some minor changes here and there, usually returning to the long term average. This is especially so for the entire country, ie Rents are directly related to incomes in a narrow range between 24% and 26%.
  2. Tauranga is prone to extreme breakouts, see both 2005 and 2019 where supply is well below demand.
  3. Auckland rents are 5% greater portion of income than all other cities (28% compared with 23% for the average other cities. But Auckland rents are almost static since 2006.

Variations of rents/incomes appear to be directly related to the rate of construction, ie supply increases to meet demand.

Reviewing the whole of NZ, some smaller regions have very high rents compared to income, we can only guess why, eg Northland is likely due to low incomes on average, with high rents in expensive beach pockets, but I don’t know.


Close study shows strong growth in Tauranga (Bay of Plenty), where the proportion has rarely moved out of the range over 20 years from about 24-25% to almost 27% now due to severe shortages. Wellington on the other hand, where rents are also now rising quickly, has come off a very low 21.5% in 2016 to catch up the the normal range of 22-23%, probably overshooting a bit due to shortages, reaching 24%.

Auckland on the other hand with plenty of properties for rent remains well within its long term range, although that appears high. Possibly due to inner city student rents?

Jonette 2011