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Rising house prices have widened wellbeing gaps in Aotearoa New Zealand
Research conducted through Motu Research and Te Herenga Waka - Victoria University of Wellington (VUW) shows renters’ wellbeing has fallen as property prices have surged.
Between 2005 and 2021, house prices in Aotearoa New Zealand rose 142%. New research finds this surge has deepened inequalities in New Zealanders’ wellbeing.
The study shows while outright homeowners have seen small gains in their financial wellbeing, renters have lost ground. When property prices rise, renters have less money to spend on essentials, while households with mortgages are no better off financially.
Renters also feel the effects emotionally. The research finds both private and public renters report lower life satisfaction as property prices rise, while homeowners’ happiness barely shifts.
Motu Senior Fellow and VUW Professor, Arthur Grimes, said the research highlights how housing markets and economic policy can shape wellbeing in different ways across society.
“Our findings show rising property prices can make some people feel better off while leaving others struggling,” he said. “If we want to support wellbeing for everyone, we need to look closely at how monetary and other policies affect house prices and rents.”
The study also finds inflationary macroeconomic policies have helped drive property prices up, which in turn has magnified wellbeing differences between homeowners and renters.
The researchers say policymakers can help close these gaps by considering how higher house prices and rents affect people’s wellbeing—especially for renters—when designing monetary and housing policies.
Arthur Grimes commented: “Good policy can ensure prosperity supports everyone, no matter their housing situation.”
About the research
The study uses data from 84,732 households collected by Stats NZ between 2006 and 2024. It examines how property prices—both house prices and rents—affect two measures of wellbeing:
Objective wellbeing: measured by how much households spend after housing costs.
Subjective wellbeing: measured by self-reported life satisfaction.
The findings show that macroeconomic policies, operating through the property market, have contributed to wellbeing inequalities associated with housing tenure.
