5 Ownership

Patterns of home ownership are now examined. Section 5.1 presents bivariate descriptive analysis of home ownership across groups and over time. To guard against the possibility of drawing spurious relationships between variables multivariate analysis is required and presented in Section 5.2. In particular, the results of a logistic regression of home ownership status are discussed where the relationship between a range of factors on the likelihood of owning a home are considered. These include: income; age; education; gender; ethnicity; New Zealand born; region; partnership status; and regional house prices.

5.1  Descriptive analysis

Patterns of housing tenure between 1984 and 2010 are described in Figure 4. Home ownership peaked in the late 1980s / early 1990s with nearly 75% of households owning the home they lived in. By 2010 this had fallen to around 65%, split evenly between those living in homes with and without mortgages respectively. With rapidly rising house prices during the 2000s and relatively stable rent, the proportion of household living in private rental accommodation increased substantially from the late 1990s to 2010.

Briggs (2006) suggests that at least part of the decline in home ownership over this period is attributable to the increasing number of homes held in Family Trusts. Statistics New Zealand changed questions in HES late in the period to account for this, possibly creating a discontinuity in measurement of home ownership. In the case of SoFIE, questions about family trusts were asked from the outset so no such discontinuity should exist. However, complications remain that mean home ownership may to some extent also be underreported in SoFIE (see for example Scobie and Henderson, 2009).

Figure 4 - Housing tenure

Source: Statistics New Zealand (HES) data

Figures 5 through 9 examine the proportions of individuals and couples who own their homes in each of waves 2, 4 and 6 of SoFIE, by income, age, ethnicity and region respectively. Generally, couples are far more likely to own their homes than singles, with the proportion of couples owning their homes being 63% over all three waves compared to 42% for singles.[10] Overall, the proportion of individuals owning their home declined slightly between 2004 and 2008, from around 58% to 55%.

For couples there appears to be little relationship between income and home ownership. For singles home ownership increases with income for the most part (the second income quintile has relatively high home ownership but this is likely due to high numbers of retirees in this group).

Figure 5 - Home ownership by income

Source: Statistics New Zealand (SoFIE) data

Home ownership increases with age regardless of partnership status and across all three waves of SoFIE, however, the relationship is particularly strong for singles. Mortgage-free home ownership also increases with age, such that, nearly 100% of singles and over 90% of couples over the age of 65 who own their homes do so without mortgages. Given that home ownership is more prevalent amongst couples, it is interesting that conditional on owning a home, mortgage free home ownership is much more likely for singles than couples.

Figure 6 - Home ownership by age

Source: Statistics New Zealand (SoFIE) data

Figure 7 - Mortgage-free home ownership by age

Source: Statistics New Zealand (SoFIE) data

Single Europeans are around twice as likely to own their home as singles belonging to any other ethnicity. Coupled Europeans are also relatively more likely to own their home than those from other ethnicities, though the difference is less pronounced and diminished between 2004 and 2008. Regardless of partnership status and survey wave, pacific peoples have the lowest levels of home ownership.

Figure 8 - Home ownership by ethnicity

Source: Statistics New Zealand (SoFIE) data

Finally, given our discussion of house prices in Section 3, it is not surprising that home ownership is lower in Auckland than in any other region for both singles and couples over the entire period of analysis. The rest of the South Island (for singles) and Wellington (for couples) had the highest rates of home ownership, though particularly in the case of Wellington, these declined significantly over the period.

Figure 9 - Home ownership by region

Source: Statistics New Zealand (SoFIE) data