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Household Economic Survey (Income): Year ended June 2015
Embargoed until 10:45am  –  26 November 2015
Commentary

Points to note

The Household Economic Survey (HES) measures annual income and housing expenses from a sample of New Zealand households.

This year, we revised the HES weights to account for the updated population estimates from the 2013 Census. We do not recommend comparing this year's results with last year's.

See HES population rebase for more information.

All expenditure and income figures relate only to households reporting that expenditure or income.

All income figures refer to gross (before-tax) income.

All income and expenditure changes in this commentary are statistically significant, unless they have an asterisk (*) alongside.

Overview

Between the two years ending 30 June 2014 and 30 June 2015:

  • average annual household income from regular sources increased 5.7 percent, to reach $93,880.
  • average expenditure on housing costs did not increase as much as income, up 4.0 percent,* to $15,403 (or $295.40 per week).

During the latest year, New Zealand households spent, on average, 16.0 percent of their income on housing costs. This was marginally less than the 16.2 percent in 2014.

Nearly one-third of households spend one-quarter of income on housing

Some households spend more (or less) than 16 percent of their income on housing. In the year to June 2015, 30 percent of households spent a quarter or more of their income on housing costs.

Compared with other New Zealand households these households were more likely to: 

  • be a single-person household, or a sole parent with dependent child(ren).
  • receive other government benefits – such as Working for Families tax credits, student allowances, or benefits from Work and Income.

These households were less likely to:

  • own or partly own the dwelling they live in.
  • receive income from investments or New Zealand Superannuation.

Housing costs continue to increase 

Mortgage and rent payments increase

Average weekly household mortgage payments during the year were $400.20 – up 3.0 percent* since 2014. At the same time, rent payments increased 4.2 percent* to $301.00.

During the year, 33 percent of households reported making mortgage payments, and 36 percent made rent payments.

The increase in rent payments was particularly strong in the Auckland region, up 10.9 percent* to $395.30 per week. Households in Auckland continue to spend more on rent than households in other regions. The average weekly rent payment in Wellington was $296.10, followed closely by Canterbury, at $292.10.

 Note: y-axis doesn’t start at zero.

Mortgage payments are partly influenced by interest rates. Over the last two survey periods average interest rates have increased:

  • up 0.8 percentage points (to 6.6 percent) for floating rates
  • up 0.6 percentage points (to 6.1 percent) for two-year fixed rates.

These rates are annual averages of the monthly interest rates published by the Reserve Bank of New Zealand.

Building-related insurance still on the rise

Weekly spending on building-related insurance increased 9.9 percent in the year to June 2015, to $28.70. The increase was particularly noticeable in Canterbury, where this spending was up 16.1 percent.

Since 2011, building-related insurance payments have increased by over 70 percent. On average, households now spend $12.10 more a week than in 2011.

Note: y-axis doesn’t start at zero.

Average household income grows

Since 2014, average annual household income from regular sources has increased 5.7 percent, to reach $93,880.

The biggest contributor to this change was the increase in wages and salaries – up 2.9 percent* to $90,878.

Household income from wages and salaries has steadily increased over the last few years. However, in 2015 the proportion of households reporting this type of income also increased – to 76 percent of households, up from 74 percent in the previous year.

 

  

Income from New Zealand Superannuation

Income from New Zealand Superannuation was another contributor to the change in household income. 

Average annual household income from this source increased 4.8 percent, to reach $24,322. Just over one in four households receive income from New Zealand Superannuation, and this proportion has been steadily increasing as the baby boomers turn 65 years.

 

Fewer people receive other government benefits

Other government benefits include income from Working for Families, main benefits, emergency benefits, student allowances, and supplements.

Over the year to June 2015, average annual household income from other government benefits was $12,084. This is marginally lower than last year’s estimate of $12,596*. The number of households receiving income from other government benefits has continued to decline, down 0.5 percent* from 2014, to 538,800 households.

Household income sufficient for most people

We randomly selected one person 18 years or over in every household to complete an additional questionnaire on behalf of the household.

Respondents were asked how adequately their household income meets their everyday needs (eg accommodation, food, and clothing expenses). Of the people asked:

  • 59 percent reported their income was enough or more than enough
  • 28 percent said it was only just enough
  • 12 percent said it was not enough.

Graph, Adequacy of income to meet everyday needs, year ended June 2015.

 

For more detailed data, see the Excel tables in the 'Downloads' box.

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