According to consulting firm Demographia’s housing affordability survey New Zealand’s housing is “severely unaffordable” at more than five times incomes, rising to more than six times in Auckland, where the rate of home ownership has dropped from 74% in 1986 to 58.7% in 2011.

Out-going Retirement Commissioner Diana Crossan said recently that the issue of people reaching retirement age without owning their own homes was even bigger than the rising cost of New Zealand Superannuation.

“Rates of poverty amongst retirees who own their own home outright are much lower than those who are still paying a mortgage or rent," Crossan told a seminar on the government’s fiscal projections earlier this month.

“Unfortunately, housing affordability has declined to a point where, now, a house costs five times a salary, compared to two-and-a-half times a salary in the 1990s, and rates of home ownership are declining."

Institute of Financial Advisers president Nigel Tate said if the issue wasn’t being addressed by financial planners then it should be.

“It’s the one single factor that will influence requirements in retirement.  Rent or mortgage is the biggest individual component of people’s budget; 30-35% of people’s budget goes on that one outcome,” he said.

“If you can get a debt-free home by the time you retire you will be substantially better off.”

G3 Financial Freedom adviser Tracey Coxhead said her experience was that most people have a home but if they don’t do proper retirement planning they won’t pay their mortgage off in time.

“People have an inclination to borrow but a flasher house isn’t going to pay the bills.”

Coxhead said there was a gap between investment planners with lump sum clients who tend to own their own home outright and mortgage brokers who often aren’t AFAs and therefore can’t provide their advice as part of a wider financial plan.