Residential housing has been largely dictated by international trends and designs. Early colonization by European settlers has contributed to the type of homes located in the country (cottages and villas). Housing quality has been a prevalent issue in recent times. According to homeowners, homes in New Zealand were always damp and cold, which can lead to various health-related issues. While renters generally found their accommodation to be suitable, many reported housing quality issues such as the presence of mold. Newer buildings are now subject to stricter building codes compared to existing homes.
Housing affordability has become an important issue across the country. With house prices rising disproportionally compared to incomes, many believe New Zealand is in a property bubble. The home ownership rate was at its lowest level since 1951, partly due to rising house prices across the country. New Zealand has one of the highest house price-to-income ratios in the world, as well as the highest house price compared to rent.
In an attempt to tackle the affordability problem, in 2018, the New Zealand government passed legislation that would only allow New Zealand residents, Australians and Singaporeans to buy homes in the country, restricting residential property buying by foreign investors. In 2019, the majority of residential mortgage lending went to owner-occupiers where the property was not their first home, indicating New Zealanders were investing in multiple homes, or upgrading or downgrading their existing dwelling.