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Buying a home less achievable over last year

Last updated 07:57 25/01/2013

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Home affordability in New Zealand's cities worsened only slightly last year with the average metropolitan house costing 5.3 times the average income, up from 5.2.

The Annual Demographia International Housing Affordability Survey uses a median multiple where the house price is divided by household income. The survey rates 5.1 and over as severely unaffordable.

Auckland is the least affordable market with a median multiple of 6.7.

But that compares favourably with Hong Kong (13.5), Vancouver (9.5), Sydney (8.3) and Melbourne (7.5).

Christchurch (6.6), Tauranga-Western Bay of Plenty (5.9), Wellington (5.4) and Dunedin (5.1) also rate as severely unaffordable.

Three metropolitan areas were "seriously unaffordable": Palmerston North (4.4), Napier-Hastings (4.5) and Hamilton (4.7).

Finance Minister Bill English tackles the issue of affordable housing in the study's introduction, saying the Government was focusing on four structural impediments in order to restore affordable housing: Land supply, infrastructure, process and construction costs.

He also told Radio New Zealand that the Government was "focused on working with councils" to make housing more affordable.

Mr English said Treasury forecasts showed house prices could continue rising this year but that a lift in supply could see prices level off after that.

Internationally, housing affordability was little changed in 2012 with the most affordable markets being in the recession-hit parts of the United States and Ireland.

However, San Francisco (7.8) and Los Angeles and New York, both at 6.2, rate as severely unaffordable.

Detroit, hard hit by unemployment and foreclosures, has the survey's most affordable housing at a multiple of 1.5.

Dublin, where property prices have plunged in the wake of the global financial crisis, comes in at 3.6.

London prices stay stubbornly high, at a multiple of 7.8.

"Houses in New Zealand are now nearly 80 per cent more expensive than the historic affordability housing norm of 3.0, last experienced in the 1990s," the survey said.

- Fairfax NZ News

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