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Times are still tougher for renters in New Zealand than at any time in at least 20 years, Corelogic's latest data shows.
It has released its latest housing affordability report, which shows that, although affordability of ownership is improving, people who are renting are still facing a squeeze.
The median rent to median household income ratio is at 28 percent, compared to 26.4 percent five years ago and 25 percent ten years ago.
Corelogic chief property economist Kelvin Davidson said the measure had been steady at 28 percent for three years, even as incomes rose.
He said it was a record level and the highest point for at least 20 years, based on Corelogic's data.
"Clearly, this measure suggests that although buying a house has become less unaffordable in recent quarters, the situation for renters hasn't really improved at all.
"It is also important to acknowledge that some will be finding it much harder than these figures suggest, given that many renting households may actually have incomes below the average. Put simply, they might pay typical rents, but have incomes towards the lower half of the spectrum."
Wellington had the lowest rental burden at 23 percent of income, while Christchurch and Dunedin were experiencing rising rental costs relative to income.
Davidson said high rents compared to income could make it harder for tenants to save a deposit, if ownership was their goal.
"It's tricky for renters, there's no doubt about that. Not only are they paying day to day living costs but trying to save a deposit is going to be tough. Ultimately it's about raising housing supply and getting more housing across the country of different types."
The pressure on tenants could reinforce the divide between those who owned property and those who were trying to get into the market, he said.
"The affordability equation for renters hasn't improved in the same way as for buyers. Many tenants are already stretched, and this limits landlords' ability to raise rents further.
"Without stronger wage growth or greater access to affordable housing, rental costs will remain a key challenge for many New Zealanders."
But for those purchasing a home, affordability was at the best level since 2019 on some measures.
"I doubt anyone is rushing out there saying look how cheap it is, but it is a bit more affordable," Davidson said.
The number of years required to save a deposit had fallen from 11.3 five years ago and 13.5 at the peak to 9.8.
This assumes a household saves 15 percent of their gross annual household income, based on median income data from Infometrics.
New Zealand's median value of $804,366 in December was 7.3 times the median annual household income of $109,975, a drop from 10.1 times at the peak.
The measure of mortgage payments as a share of gross median household income was at its lowest point in three-and-a-half years.
"Housing isn't cheap, but it's the most affordable it's been on many measures since before Covid-19. The surge in property prices through 2020 and 2021 created a significant affordability challenge, but much of that deterioration has now reversed," Davidson said.
Auckland and Wellington had some of the biggest improvements in affordability and were close to long-term averages.
Wellington was back at pre-2017 affordability levels, with a value-to-income ratio of 6.5
"For a market that has had such a big downturn like Wellington, combined with rising incomes and lower mortgage rates, for them affordability might look quite a bit better," Davidson said. "There could be some value there."
Davidson said debt-to-income ratios could help keep a lid on housing affordability but more supply was needed.
"There may be a period where house prices are flatter and incomes have a chance to catch up, and if the government can make some inroads into housing supply, affordability may stay more in check than it has done in certain times in the past."
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