Average pay up, but it's not all good news

The average household's income rose 5.2 per cent in the year ended June - half the previous year's increase - but its housing costs were almost unchanged.

Statistics NZ's household economic survey, out yesterday, also showed that the average pre-tax income in Auckland was almost $2000 lower than in Wellington and Aucklanders spent more of their income on housing, 16.3 per cent compared with 15 per cent in the capital.

As usual, average numbers mask wide variations.

Average household incomes from wages and salaries rose 7 per cent in the 2008/09 year, similar to the year before, reflecting that employees' pay is the last cab off the rank during economic downturns - and upturns.

The self-employed, whose incomes are most sensitive to economic ups and downs, had their incomes fall 13.5 per cent, compared with a 22.8 per cent rise the year before.

New Zealand Superannuation went up 6.4 per cent, but income from private superannuation schemes fell 16.3 per cent. Other Government benefits rose 2.2 per cent.

Average housing costs were up only 0.6 per cent.

That masked the fact that rent payments rose 8.1 per cent and rates 6.4 per cent, but those with mortgages paid less in interest (down 2.8 per cent) and principal repayments (down 7.1 per cent).

The median rent in Auckland - which means as many renters pay more than this as pay less - was $300 a week, 20 per cent above the national average and $20 more than in the 2007/08 year.

Of those households who do not own their own home, 44 per cent spent at least a quarter of their pre-tax income on housing. For 19 per cent of them, housing costs ate up more than 40 per cent of their income.

Among owner-occupiers, 19 per cent spent more than quarter of their income on housing and only 6 per cent spent more than 40 per cent.

Of those households paying off a home loan, 25 per cent paid more than $500 a week in mortgage payments, down from 28 per cent the previous year.

That mainly reflects falling mortgage interest rates, the statisticians said.

The survey also sheds some light on how people view their standard of living.

Of some 1.6 million households, 578,000 rate their standard of living as high or fairly high and only 130,000 as low or fairly low.

To have the best chance of being in the top 10 per cent of the population by income, it pays to be male, employed, European, in your early 40s and have a tertiary qualification.