Declines in affordable rented properties were consistent with "poor housing policies" says the author of a new report. File photo. Photo: 123RF
Affordable rental properties are increasingly scarce, new data shows - and that's prompted calls for New Zealand to reconsider a capital gains tax.
Research produced for the Child Poverty Action Group has looked at the affordability of a range of rental housing sizes, for households on middle incomes, low wages and benefits.
Rent was considered affordable when households could pay it and still have enough money left to cover their basic livings costs.
The report showed that for low-income working families, Northland's share of affordable rental housing dropped 14 percent between 2018 and 2023, Bay of Plenty's 11 percent, Gisborne 14 percent, Manawatu-Whanganui 22 percent and Southland 26 percent
Just 33 percent of three-bedroom homes across the country were affordable for this type of household in 2023, and 62 percent of one-bedrooms.
Report author Greg Waite said 12 out of the 16 regions included in the research showed quite large declines in affordable rentals.
"We're building apartments but what we are seeing is significant losses in larger dwellings as they get redeveloped or taken a bit upmarket, the rent can get out of reach."
He said the declines were consistent with "poor housing policies".
"We are unusual in not having a capital gains tax, which incentivises over-investment in property. That over-investment targets resale profit rather than new construction and pushes up prices, first in big cities and later in regions.
"Rental rates of return fall as prices rise, but are boosted by large tax transfers to landlords for interest payments. And we provide tax concessions for large-scale investment in expensive rent-to-buy apartment blocks, but lack incentives to build new affordable homes for lower-income households."
He said the construction of smaller rental properties was a positive outcome of recent regulatory changes to encourage density but the direction from here was less clear.
He said he expected rents to rise faster than inflation into the future. Rents were up 4.5 percent on a stock basis over the year to June, according to Stats NZ, and 2.5 percent on a flow basis, which only measures new tenancies.
Waite said New Zealand should be open to a discussion about a capital gains or wealth tax. "I'm not a policy specialist and I emphasise that policies have to be a balanced mix. In New Zealand we are trying to manage down housing prices, we do have the most unaffordable housing in the world by many measures - our rental affordability is second worst to Finland… we really have serious rental affordability problems."
He said the country "had to pay attention" when the conditions made it harder for low income working households to get by.
On a regional level, availability of affordable rental properties for low-wage households dropped across the boards except for one- and two-bedroom homes in Auckland, four-bedroom homes in West Coast and two-, three-bedroom and overall availability in Canterbury.
One Wellington tenant, Jaimee, said it seemed to be that finding an affordable house meant accepting worse living conditions. She lives with eight other people paying $225 each a week.
"For a student that's a lot of money, especially being a student fulltime and having to work part-time to have enough money to live. Half the rooms in this house don't even get any sun but our landlord is better than others - he could definitely charge more and people would pay it."
Green Party spokesperson Tamatha Paul said there needed to be more public housing.
She said it was notable that the research showed that there were affordability problems beyond the main centres.
"There are unique challenges for people who live in the regions, they might have less access to social support services, less concentration of public housing, emergency housing and other backups. It goes to show the widespread nature of the housing crisis."