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Determinants of Housing Tenure Choice in New Zealand

Author/s: Bob Hargreaves

Date Published: 1/01/2003

Published in: Volume 9 - 2003 Issue 3 (pages 203 - 223)

Abstract

Over the last 15 years, the rate of home ownership in New Zealand has declined from 73% to 67%. The reasons for this decline are not clear, because there has been a lack of up-to-date research focusing on the determinants of housing tenure choice. This paper reports on a survey of private sector renters carried out in 2002. Respondents were asked to identify perceived impediments to ownership, and financial considerations were the main reason for renters not switching to home ownership. Difficulties in saving for a deposit on a house and the need to pay off existing debt were the main financial reasons cited. Lack of job security and the conflict between work and raising a family were also reported as being important. Hedonic models confirm the importance of household income as one of the key variables determining household tenure, particularly in the lower rent suburbs. The percentage of the population that are married was the dominant variable influencing the percentage of houses rented.

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Keywords

Home Ownership - Housing Affordability - New Zealand - Tenure Choice

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