Horowhenua renters faced with ‘severely unaffordable’ market

Horowhenua has the highest percentage of income being spent on rent in the country, with some spending half their earnings putting a roof over their head.

Dot Loves Data spokesman Justin Lester said Horowhenua had an average rate of 40 per cent of income spent on rent, as of July this year.

Lester said both lower incomes in the region and increasing rent prices were contributing factors.

“Low median household income, and it’s proximity to Wellington means rental prices are increasing as well.”

READ MORE:
* Relocating Aucklanders ‘pushing up rents around NZ’
* Desperation driving up Levin property prices, says agent
* Hamilton housing third-most unaffordable in the country, says new report

Dot Loves Data spokesman Justin Lester says Horowhenua has an average rate of 40 per cent of income spent on rent.

ROBERT KITCHIN/STUFF

Dot Loves Data spokesman Justin Lester says Horowhenua has an average rate of 40 per cent of income spent on rent.

Nearby areas Kāpiti and Palmerston North were at 34 per cent and 30 per cent, respectively.

Lester said about 30 per cent was normal, but ideally no more than 25 per cent of household income should be spent on rent.

He said Wellington had a huge effect on Horowhenua, with people from the capital able to buy property due to having higher incomes.

This pushed prices up for residents, and it was only going to increase when Transmission Gully opened.

Housing Minister Megan Woods said the Government was aware of the impact Wellington was having on area such as Horowhenua.

“We know Wellington’s growth has a knock on effect for housing, transport and economic development in the Wairarapa and Horowhenua regions.

“In response to this The Wellington Regional Growth Framework, a joint spatial plan for Wellington-Wairarapa-Horowhenua, has agreed some growth areas.

“The plan anticipates accommodating 200,000 extra people in the region in the next 30 years.”

STUFF

Housing Minister Megan Woods announces a new bill to force councils to enable more dense housing. (Video October 2021)

Nationally, rental costs had increased by 17 per cent over the past three years, and higher rental prices weren’t good news for those trying to get into home ownership.

Based on average rental prices and household incomes in Horowhenua, it would take people an average of 19 years to save up for a 20 per cent home deposit.

Lester said supply was everything, and if there were more people seeking to rents than house available to rent, prices would continue to be pushed up.

The percentage of income going on rent was even higher in two parts of Horowhenua, in Foxton it was 45 per cent and in Shannon it was 51 per cent.

In June, Hāpai Te Hapori community innovation navigator Sharon Williams told Stuff Shannon’s issues with housing stemmed from affordability and accessibility.

The Horowhenua District Council’s 2019 Housing Action Plan acknowledged the supply of housing in the region was not keeping pace with demand.

The plan used median multiple, the ratio of the median house price by the median gross annual household income, to get an indication of housing affordability.

Severely unaffordable was 5.1 and over, seriously unaffordable 4.1 to 5.0, moderately unaffordable 3.1 to 4.0, and affordable 3.0 and under.

Based on the median household price of $324,000 and a median household income of approximately $43,600, the median multiple for Horowhenua was 7.4.

“This indicates housing to be severely unaffordable in Horowhenua based on median household income and median house price,” the plan said.

As part of the plan, a target of housing in Horowhenua having a median multiple measure of 3.0-4.0 by 2030 was proposed.

For those on low incomes who may need public housing, household spending should be no more than 25 per cent of household income, it stated.

There were 209 applicants on the social housing register in Horowhenua as of June this year, according to a public housing report by the Ministry of Social Development.

Councillors will consider a streamlined housing process, which would be trialled next year, at a council meeting on Wednesday.

It is designed to encourage more intensive housing developments than what is currently being delivered by the market.

Horowhenua District mayor Bernie Wanden has been approached for comment.

Leave a Reply

Your email address will not be published.