No affordable housing in NZ: Survey
All major housing markets in New Zealand are “severely unaffordable” with Auckland leading the way as the country’s least affordable location to buy a house.
Monday, January 23rd 2012, 12:00AM
by Benn Bathgate
The eighth annual Demographia International Housing Affordability Survey ranked New Zealand alongside Australia and Hong Kong in having no affordable housing markets.
New Zealand and Australia were also singled out in the report for a deterioration in affordability that is "unprecedented based upon the available historical data."
"Australia and New Zealand, for example, which had legendary housing affordability from after World War II to the 1980s and 1990s have seen house prices reach levels that are double to nearly triple their historic ratio to household incomes," the report said.
The survey examined seven countries - Australia, Canada, China (Hong Kong), Ireland, New Zealand, United Kingdom and the United States - using median house price divided by gross annual median household income to assess housing affordability.
New Zealand housing was rated "severely unaffordable" with a median multiple of 5.4, nearly three-quarters above the historic affordability norm of 3.0.
Auckland was the country's least affordable market with a median multiple of 6.4.
Across the seven countries surveyed, only nine large metropolitan markets were ranked as less affordable than Auckland (Hong Kong, Vancouver, Sydney, Melbourne, San Jose, San Francisco, Adelaide, London, London Suburbs).
Also ranked with Auckland among the severely unaffordable was Christchurch (6.3) followed by Tauranga/Western Bay of Plenty (5.9), Dunedin (5.2) and Wellington (5.1).
Palmerston North (4.1), Napier/Hastings/Hamilton (4.8) were ranked as seriously unaffordable.
"New Zealand had no affordable markets and no moderately unaffordable markets," the report said.
New Zealand is also uniquely singled out in the report for a warning about the role of its largest city - Auckland - and the country's economic performance.
Demographia highlights how Auckland's population gives the city a crucial role in the country's economy, and how its unique Super City governance structure may be hampering affordable housing efforts.
"The proclivity of planners. . . has been strongly in favour of more restrictive land use regulation," the report says.
"Because of its size relative to the nation and lack of competition from jurisdictions within reasonable commuting distance this is a particular risk for New Zealand."
Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz
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