In just 12 years, a much larger proportion of home owners will be superannuitants and renters will rise by a third, many of them elderly.
Research commissioned by the Building Research Association suggests that rental households between 2013 to 2026 will soar, as a growing number of people who did not climb on the property ladder in their 20s and 30s head into middle age without a home.
Some of them would still not have a home in another decade, with a 75.9 per cent rise in renters over the age of 65. Younger renters - those under 40 years - are expected to grow by 19.3 per cent.
Homeowners will also age. Young owner-occupiers will decline by 6 per cent and middle aged ones will drop by 8.6 per cent, but elderly home owners will rise by 43 per cent.
"That's the last of the baby boomers shifting into that 65 years and over age group," said the report's author, Ian Mitchell of Livingston Associates.
Mitchell said the renting trend was more aggressive than he had previously estimated, and it would put more pressure on the private sector to provide more accommodation. Only structural change would prevent renting growing faster than home ownership.
"Unless we get a period where household incomes grow at a faster rate than house prices, we're unlikely to see much change in these trends."
Growing population will also play a part. Between 2013 and 2021 household numbers are tipped to grow by 170,000. This would mean there will be 57,000 more owner-occupiers and 113,00 more renters.
"If you look at a slightly longer period, which is 2013 to 2026, the number of homeowners is projected to increase by 7.2 per cent, which is not bad growth, but the number of renters is projected to grow by 32.4 per cent," Mitchell said.
"So effectively two-thirds of the growth is projected to come from renter households."
Currently home ownership is just under 65 per cent of all households, down 9 percentage points since 1991. By 2026, Mitchell believes it will drop another 5.2 percentage points to 59.6 per cent.
In some locations, home ownership levels among people in their early 30s was more than 30 per cent lower than previous generations.
"If these trends continue, regional home ownership rates of less than 50 per cent in two decades are possible."
Southland, Northland and Gisborne would experience the largest falls in home ownership between 2013 and 2026, as their populations aged.
Mitchell said reasons home ownership had dropped included student debt, people forming households later in life, and changes in people's spending aspirations. Another driver was housing policy, "particularly the 1980s, which reduced the support of owner occupation".
Changes in the labour market meant people were more mobile, with less job security and a widening gap in incomes.
Increasingly available credit and lower interest rates had also drawn many younger households into high debt, impeding their ability to save for a house.
Auckland had additional challenges. Its housing stock had risen 19.3 per cent but that lagged behind a 27 per cent rise in population growth between 2001 and 2013.
But perhaps the bigger challenge was the fact that incomes were being outpaced by house prices. In Auckland, median house prices in the city had risen 130 per cent to $590,000 between 2001 and 2013.
But median household incomes only rose 56 per cent to $76,500 over that time, and median rents increased 66 per cent to $465 per week.
This uneven distribution of wealth was likely to continue, said Mitchell.
"The challenge, is how do households afford the cost of housing if their incomes are struggling and aren't sufficient to pay the market rate of housing costs?"
The answer was usually overcrowding or people shifting to outlying suburbs or satellite towns.
Ironically, when families crowded up, the total household income generally rose, but it did not reflect the true nature of things.
"One of the things we've seen in recent past is the incomes of higher income households go up much faster than the incomes of lower income households, so it's that skill set divide almost."
The rise in renters would have several implications, the report said. Aside from the impact on people's wealth, there would be a significant rise in demand for houses.
The private sector would need to make a level of investment similar to the last 10 years, and the Government would have to "finely balance the needs of tenants" with the needs of landlords.
Auckland would see faster growth in owner-occupier and renter households than the national average, which made its housing supply problems more important.
One possible answer to the barriers to home ownership was to encourage people to buy multi-unit dwellings, the report said. At present 36 per cent of multi-unit dwellings - such as townhouses or apartments - were owned, compared to 72 per cent of standalone dwellings.
The research by Livingston and Associates is ongoing and being funded by the Building Research Levy.
Future work would include a look at migration trends within the country and on regional housing markets, Mitchell said.
Research commissioned by the Building Research Association suggests that rental households between 2013 to 2026 will soar, as a growing number of people who did not climb on the property ladder in their 20s and 30s head into middle age without a home.
Some of them would still not have a home in another decade, with a 75.9 per cent rise in renters over the age of 65. Younger renters - those under 40 years - are expected to grow by 19.3 per cent.
Homeowners will also age. Young owner-occupiers will decline by 6 per cent and middle aged ones will drop by 8.6 per cent, but elderly home owners will rise by 43 per cent.
"That's the last of the baby boomers shifting into that 65 years and over age group," said the report's author, Ian Mitchell of Livingston Associates.
Mitchell said the renting trend was more aggressive than he had previously estimated, and it would put more pressure on the private sector to provide more accommodation. Only structural change would prevent renting growing faster than home ownership.
"Unless we get a period where household incomes grow at a faster rate than house prices, we're unlikely to see much change in these trends."
Growing population will also play a part. Between 2013 and 2021 household numbers are tipped to grow by 170,000. This would mean there will be 57,000 more owner-occupiers and 113,00 more renters.
"If you look at a slightly longer period, which is 2013 to 2026, the number of homeowners is projected to increase by 7.2 per cent, which is not bad growth, but the number of renters is projected to grow by 32.4 per cent," Mitchell said.
"So effectively two-thirds of the growth is projected to come from renter households."
Currently home ownership is just under 65 per cent of all households, down 9 percentage points since 1991. By 2026, Mitchell believes it will drop another 5.2 percentage points to 59.6 per cent.
In some locations, home ownership levels among people in their early 30s was more than 30 per cent lower than previous generations.
"If these trends continue, regional home ownership rates of less than 50 per cent in two decades are possible."
Southland, Northland and Gisborne would experience the largest falls in home ownership between 2013 and 2026, as their populations aged.
Mitchell said reasons home ownership had dropped included student debt, people forming households later in life, and changes in people's spending aspirations. Another driver was housing policy, "particularly the 1980s, which reduced the support of owner occupation".
Changes in the labour market meant people were more mobile, with less job security and a widening gap in incomes.
Increasingly available credit and lower interest rates had also drawn many younger households into high debt, impeding their ability to save for a house.
Auckland had additional challenges. Its housing stock had risen 19.3 per cent but that lagged behind a 27 per cent rise in population growth between 2001 and 2013.
But perhaps the bigger challenge was the fact that incomes were being outpaced by house prices. In Auckland, median house prices in the city had risen 130 per cent to $590,000 between 2001 and 2013.
But median household incomes only rose 56 per cent to $76,500 over that time, and median rents increased 66 per cent to $465 per week.
This uneven distribution of wealth was likely to continue, said Mitchell.
"The challenge, is how do households afford the cost of housing if their incomes are struggling and aren't sufficient to pay the market rate of housing costs?"
The answer was usually overcrowding or people shifting to outlying suburbs or satellite towns.
Ironically, when families crowded up, the total household income generally rose, but it did not reflect the true nature of things.
"One of the things we've seen in recent past is the incomes of higher income households go up much faster than the incomes of lower income households, so it's that skill set divide almost."
The rise in renters would have several implications, the report said. Aside from the impact on people's wealth, there would be a significant rise in demand for houses.
The private sector would need to make a level of investment similar to the last 10 years, and the Government would have to "finely balance the needs of tenants" with the needs of landlords.
Auckland would see faster growth in owner-occupier and renter households than the national average, which made its housing supply problems more important.
One possible answer to the barriers to home ownership was to encourage people to buy multi-unit dwellings, the report said. At present 36 per cent of multi-unit dwellings - such as townhouses or apartments - were owned, compared to 72 per cent of standalone dwellings.
The research by Livingston and Associates is ongoing and being funded by the Building Research Levy.
Future work would include a look at migration trends within the country and on regional housing markets, Mitchell said.
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