Super City affordability slides further
Monday 23 January 2017
Auckland has been ranked the fourth least affordable city of the 92 major housing markets included in an international housing affordability survey.
By Miriam Bell
According to the 13th Annual Demographia International Housing Affordability Survey, which compares the median house price to the median household income, Auckland is one of 29 severely unaffordable housing markets.
This is because 10 times the median household income ($83,000) is required to buy a median priced house ($830,000).
While Auckland has long been ranked as severely unaffordable, the situation has grown worse as the city’s prices have skyrocketed.
Last year it was at number five in the survey’s rankings - when the median house price was $748,700 and median incomes were $77,500 - but it has now moved up to fourth place.
Only Hong Kong, Sydney and Vancouver are more unaffordable.
The survey points to restrictive urban land supply and planning rules as the reason for Auckland’s ongoing decline in affordability.
However, it notes that, outside Singapore, New Zealand is the only nation in the survey with a serious public policy priority to restore and maintain middle-income housing affordability.
To this end, it cites the government’s establishment of Special Housing Areas and the development of various proposals to tackle housing affordability.
But Labour Party Leader Andrew Little said the survey results show that government attempts to tackle the country’s housing crisis are failing miserably.
Overall, eight New Zealand cities (Auckland, Tauranga, Hamilton, Christchurch, Wellington, Napier-Hastings, Dunedin and Palmerston North) are identified as "seriously" or "severely" unaffordable, he said.
"Just last week, official figures showed that home ownership had slumped to its lowest level since 1951. New data also showed house prices rising three times faster than incomes in the past year.”
Piecemeal attempts to increase housing supply are failing, with Auckland’s Housing Accord failing to meet its targets and building material prices increasing, Little said.
Labour’s housing policy would see 100,000 new homes built and crack down on property speculators.
The New Zealand Initiative executive director Oliver Hartwich, who wrote the survey’s introduction, said an “incentives approach” for councils could be key to solving housing affordability in New Zealand.
“Planning reform and liberalisation remain both important and desirable.
“But without a financial framework that encourages and incentivises development, we will always struggle to deliver the houses we need.”
Comments from our readers
No comments yet
Sign In / Register to add your comment
It’s been a slow, cool start to the year for much of New Zealand’s property market but new data suggests the Wellington market is bucking the trend.
Further changes have been made to the government’s unreinforced masonry securing fund (URM Fund) which assists earthquake proofing work.
New Zealand’s lower economic growth was acknowledged by the Reserve Bank in its OCR statement today – which means there's a chance their next call could be more doveish.