BRANZ says homeowners are doing themselves a disservice, by putting off house maintenance, risking cold, draughty, unsafe homes and health problems.
Preliminary results from the fourth survey by the building research organisation shows 41% of houses are in a good condition, down from 50% in its 2005 survey.
BRANZ says people are clearly putting off maintenance as the cost of living increases. Building performance manager Mark Jones says people are spending money on aesthetics such as bathrooms and kitchens but not maintaining timber windows or getting under their houses.
The survey does not include Christchurch homes, but includes rental properties for the first time.
It shows rented homes are in a poorer state than owner-occupied homes, though it's not clear to what extent their inclusion has influenced the fall in the percentage of well-maintained homes in the survey.
Deferral has 'flow-on effect'
Wellington Medical School associate professor Philippa Howden-Chapman says deferring maintenance is understandable, but it has a flow-on effect.
"It's the tenant who bears the cost of living in a cold, damp, mouldy house and it's the tenant who has to pay more for electricity because the house might not be insulated and the heat's just going out the windows."
On a positive note, BRANZ says 100,000 homes are now insulated under a scheme with the Energy Efficiency & Conservation Authority, which has made significant improvements in air quality and energy efficiency.