Tauranga ’above’ severely unaffordable

Auckland has been ranked the ninth most unaffordable city in a survey of more than 400 cities in nine countries, with Tauranga ranked even worse.

The annual Demographia survey found Tauranga house prices were 8.9 times the median income, just a sniff worse than Auckland's "severely unaffordable" 8.8.

Survey co-author Hugh Pavletich says Auckland had improved its ranking on affordability - up from fourth least affordable last year - because of rising incomes rather than falling prices, according to Housing New Zealand.

He says proposed changes to housing policy under the new Labour government should reduce house prices around the country.

"Abolition of the urban limits for Auckland and the introduction of bond financing for infrastructure will make a huge change and I'm sure Labour will implement both.

"To be affordable, housing has to be three times the median income," Hugh says.

"Severely unaffordable is five times the median income and across New Zealand it's about 5.8 in most of the major cities. Auckland and Tauranga are way above that."

The most affordable New Zealand city was Palmerston North, while Hong Kong was still the most unaffordable city of the countries surveyed: Australia, Britain, Canada, China, Ireland, Japan, New Zealand, Singapore and the United States.

Housing strategist Leonie Freeman says it's staggering that Auckland was right up there with cities like Los Angeles and Sydney.

"The new government is bringing a new view on this but the real issue is that within the property sector we know what solutions are available and we know how to go about it," she says.

"One of the biggest challenges is we are all working in isolation. We have to find a way of working together to fix the problem of housing affordability in New Zealand and I think it can definitely be solved."

The survey only reaffirmed that councils and the government needed to look at the issue of consenting and skill shortages in the building industry, says Leonie.

Collective impact initiatives had worked overseas and would work in Auckland, she says.

"We can implement, straight away, much better reporting so we know where we are up to."

New initiatives could improve on consenting, procurement and innovation.

"So many people have great ideas on how to improve things, but there is nowhere to go."

A 10-year housing plan needed to be put in place as the three-year political cycle was not long enough to make a difference, Leonie says.



6 Comments

Anton.......

Posted on 23-01-2018 11:31 | By groutby

.... house prices have indeed increased dramatically when compared to average annual income. We have accepted a few significant couple of things in my view over many years, which contribute to this. 1) Immigration, this is necessary of course for us but when infrastructure and housing are not addressed (by successive governments over many years), it becomes part of the problem, 2) Economy...we are locked into and accept a 'low wage economy'...which surely is ok as long as nothing much changes..(which in 'world terms of course it does), so we are likely on the 'back foot' already, couple this with 3) Build cost... we have a high build cost in NZ, materials (usually unavailable here..small market etc) are significantly cheaper overseas, and ever increasing and restrictive compliance cost it makes it even harder. Competition makes costs move, we haven't got any here...central and local government can change this..

Avr

Posted on 22-01-2018 14:39 | By Anton

I came with my family in 1982 to NZ, a average house was 3.5 year average yearly income.Thanks government who let so many immigrants in, and not build the same amount of houses what they need, then we start living in tents and garages and very high house prices.And have no regulations how many houses tax free can be sold in a few years.I feel sorry for young families.And it is not only house prices, Most European complain about high food prices here. And they are right. While they earn more there.

@ Abobsworth

Posted on 22-01-2018 11:33 | By MISS ADVENTURE

No its not the market, it is the officials failing to do there job. The cost, delays and sluggish speed with which land is consented to where title is issued is the 90% cause of the housing shortages and so the prrice increases. You take out the COuncil stupid officals rules and red tape, take away the huge costs (4-8x anywhere else in NZ) and you will be close to fixing all.

@ backofthequeue

Posted on 22-01-2018 11:30 | By MISS ADVENTURE

There are in fact two better options, first (if must) use SH27 or second (even better) stay there and dont leave ...

The road to the infernal regions

Posted on 22-01-2018 10:45 | By backofthequeue

Pity those moving from Auckland who must travel New Zealand's most dangerous road (SH2) to reach New Zealand's most unaffordable city. #howlongcanitlast

Who said

Posted on 22-01-2018 10:31 | By Abobsworth

Who said there is no housing crisis it is just the market working? Can you guess. JK ?

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