New Zealand has least affordable houses
Five NZ centres in top 50 in the world
New Zealand and Australia have the least affordable homes of six countries – including the United States and Britain – according to a new survey.
The 2008 Demographia study of international housing affordability looked at 227 cities and found five New Zealand centres in the top 50 least affordable. No New Zealand cities made it on to the most affordable list.
The study rates housing affordability in New Zealand, Australia, the US, Britain, Ireland and Canada.
Median house prices were divided by median household incomes to assess housing affordability and four ratings were used; severely unaffordable (5.1 and over), seriously unaffordable (4.1 to 5), moderately unaffordable (3.1 to 4), affordable (3 or less).
Tauranga overtook Auckland as the least affordable New Zealand city, weighing in with 7.5 to make it the 20th least affordable city in the survey. It was followed by Auckland (6.9, 31), Christchurch (6.6, 34), Hamilton (6.3, 40) and Wellington (6.1, 46).
New Zealand was divided into seven areas for the survey and was the only nation in which all markets were rated severely unaffordable. Houses in Napier-Hastings cost 5.7 times more than the median annual income, while Dunedin's were 5.3.
"New Zealand has the highest-cost housing among the surveyed nations in relation to incomes. It also has the highest interest rates," the survey said.
Those contemplating a skip across the ditch in search of cheaper housing might want to think again; 18 Australian cities made it on to the severely unaffordable list.
Mandurah, south of Perth, is the sixth-least affordable overall, with houses costing 9.5 times the median annual income, Sydney (8.6, 11), Perth (7.6, 19) and Melbourne (7.3, 22).
Los Angeles, in the US, was the least affordable city overall, on 11.5, and Canada's Thunder Bay the most affordable, on 1.8.
Real Estate Institute national president Murray Cleland told the New Zealand Herald he was shocked to hear of New Zealand's ranking and that first home buyers were being hardest hit.
Tax rates were too high, and territorial authorities needed to make more land available, he said. As well, council fees for such things as building permits were too high.
"You look at small provincial towns where the councils have freed up land – it's been swept up," he told the newspaper.
"A large part of this problem is the cost of getting building permits."
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