5 September 2022

More evidence of housing burden on those in retirement

New research has reaffirmed that housing costs can be an onerous burden on those in retirement. They can be very difficult for people still paying off a mortgage as well as for those who are having to pay rent. The information has come from research commissioned by Te Ara Ahunga Ora Retirement Commission.


It was carried out by the Treasury and was based on information contained in Stats NZ’s annual in-depth research, the Household Economic Survey (HES). 


Te Ara Ahunga Ora Retirement Commission says the research will help to conclude its 2022 Review of Retirement Income Policies. The analysis shows that superannuitants still paying rent are likely to be spending 40 percent or more of their NZ Super income on housing. 


But the problem is even worse for people still paying off mortgages. Te Ara Ahunga Ora Director of Policy, Suzy Morrissey, says of those still paying off a mortgage, 80 percent are spending more than 40 percent of NZ Super on housing costs, and more than half are spending over 80 percent of NZ Super on housing costs.

When comparing to those who own their homes outright, this is almost totally reversed, Dr Morrissey says.

Of those who own their home outright, “More than 50 percent spend less than 20 percent of NZ Super on housing costs .” She adds this analysis is confined to income received from NZ Super and does not factor in other income. However, she says NZ Super is currently the only income for 40 percent of people aged 65 and over.


“And 20 percent have only a little more.”


Dr Morrissey adds home ownership patterns have changed in the last three decades. In 1986, 87 percent of people over 60 were homeowners, had their mortgages paid off and were mainly retired from employment. By 2018, home ownership of the over 60s had fallen slightly to 80 percent. But one-fifth of those retired homeowners were still paying off a mortgage, one-fifth were paying rent, and many were still in paid work.


And this trend would steepen. Long term, the balance of homeownership among the retired was expected to shift to 60 percent homeowners and 40 percent paying rent. By 2048, the renter population would amount to almost 600,000 people.

Moreover, mortgage and rent costs have been rising faster than outright ownership costs. All this creates a real challenge for many older people in the future, according to Dr Morrissey.


“When NZ Super was introduced, it was with the underlying assumption that those accessing it would be mortgage-free homeowners. Today, the reality is very different.” This latest research is just the latest in a series of reports showing just how hard it is for people to get by on NZ Super. 


The most dramatic evidence of that came from research at Massey University, which showed people living an active life with plenty of outings in the big city could need more than $500 a week on top of NZ Super to pay the costs.

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Written by:

Eric Frykberg

Semi-Retired, Eric worked in journalism for 45 years across print, radio and television, in New Zealand, Australia and Britain. He has specialised in business, finance, energy, mining, transport and agriculture. He was also foreign correspondent for RNZ for many years. He can be reached on

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