The number the good-news data misses
Rents look flat. Affordability, we keep hearing, is improving. And for the median household, that is broadly true. But a new report by Child Poverty Action Group researcher Greg Waite, published on 16 July 2026, identifies a group the headline numbers barely touch: more than 70,000 households in private rentals who are working but earn less than the full-time minimum wage per adult. Most receive no benefit. Two-thirds cannot afford their rent.
These are not people outside the labour market. They are the employed workforce, often casual, part-time, or wanting more hours they cannot get. “You can’t not pay the rent,” Waite said. “So as you know, it’s people not buying food and not having all the other things that make up a balanced life.”
Flat rents are not the same as affordable rents
The official picture genuinely looks softer. HUD’s March 2026 quarter update shows rents for new tenancies fell 0.4 percent in the year to March, with existing-tenancy rents up just 0.7 percent, the smallest annual rise since the series began in 2006. Wellington is down 2.4 percent, Auckland down 1.3 percent. HUD also recorded a 3 percent improvement in rental affordability over 2025.
But a modest easing does not unwind years of accumulation. A Newsroom fact-check in March 2026 found rents nationally still absorb 27.9 percent of gross household income, above the long-term average of 25.8 percent. The CPAG report quantifies the run-up: between 2023 and 2026, rent rose more than any other household expense, up roughly $50 a week for a working couple with two kids in the main centres, against $34 for food and $22 for transport.
Supply of affordable stock has collapsed. For low-income earners, the share of affordable housing fell from 55 percent in 2015 to 38 percent by 2024, with the worst drops in rural areas including Manawatu-Whanganui and Bay of Plenty.
Why single-income workers get hit hardest
The affordability indices flatter reality because they assume households with more than one income. Professor Graham Squires’ Regional Rental Affordability Index puts rent at 39 percent of monthly earnings nationally, down 5 percent year-on-year, but that figure assumes multiple earners. Waite is blunt about who falls through: “single people, single parents, people who can’t have two incomes, they’re structurally disadvantaged in the housing market.”
Simplicity chief economist Shamubeel Eaqub adds the awkward point that rent is set more by tenants’ ability to pay than landlords’ costs, meaning some of the recent softening may reflect demand collapsing rather than any supply-side fix.
The wage side is moving the wrong way
Housing stress lands on top of a real wage problem. OECD analysis in 2026 found New Zealand and Australia are the only two of 37 member countries with real wages still near the trough of the cost-of-living crisis. Average wage growth ran at just 0.2 percent year-on-year, down from 5.6 percent a year earlier. Infometrics chief forecaster Gareth Kiernan traces it to productivity: “We aren’t very productive when we work, our real incomes end up reflecting that, and everything seems expensive.”
For a household already spending most of its income on rent, 0.2 percent growth is functionally zero.
Where the bill lands on business
This is not a welfare-cohort story. It is a workforce story. Workers who cannot cover rent and food chase second jobs, take health hits, and leave for marginally better pay. Only 57 percent of renters feel stable and secure, against 90 percent of homeowners, a 33-point gap that reads directly as a retention risk. In one survey, 28 percent had delayed medical appointments and 25 percent skipped meals because of housing costs.
There is a mobility cost too. As Opes Partners economist Ed McKnight argued in February 2026, when people cannot afford to move they stay stuck in inferior housing, and by extension inferior jobs. That constrains the labour flexibility regional employers rely on, and it bites hardest in the exact rural areas where affordable supply has fallen furthest and labour markets are already thin.
The conclusion for anyone employing lower-wage workers is uncomfortable. When commentators cite improving affordability data, they are describing a different population from the one under real pressure. The 70,000-plus working households in the CPAG report will keep pushing for higher pay and more hours regardless of what the rent indices say, and the businesses that employ them will keep paying the downstream cost until either wages or housing supply move materially. Right now, neither is.
Sources
- RNZ: Housing pressure hardest on working households not getting a benefit – report (2026-07-16)
- Newsroom: Fact-checking Potaka’s claim that rents are more affordable (2026-03-23)
- RNZ: One in four skip meals, medical care due to cost of housing – survey (2026-04-13)
- The Spinoff: Rent is getting cheaper. Here’s why that’s not necessarily a good thing (2026-02-03)
- HUD: Housing affordability improved in 2025, but unevenly and with regional variance (2026-04-29)
- HUD: Housing market update – March Quarter 2026 (2026)
- MPA: NZ rental affordability improves across most regions, report finds (2026-06-09)
- HCA: New Zealand wages ‘near trough’ as OECD peers recover lost ground (2026)