NZ homes severely unaffordable
New Zealand ranks just behind Australia as having the least affordable homes of six countries -- including the United States and Britain.
The 2009 Demographia study of international housing affordability found Australia has the most unaffordable housing at 6.3 times annual household earnings.
New Zealand was second on 5.7. Ireland registered 5.4, the United Kingdom 5.3, Canada 3.5 and US 3.2.
None of the eight urban markets in New Zealand covered by the survey are considered to be affordable. Seven were severely unaffordable.
A figure above five is regarded as severely unaffordable.
Auckland is the least affordable larger market, with a median multiple of 6.4, while Christchurch (6.1) and Wellington (5.9) are also severely unaffordable.
Tauranga-Bay of Plenty was the least affordable market, with a median multiple of 6.6. Out of the eight New Zealand markets only Palmerston North is not severely unaffordable on 4.9.
Housing Minister Phil Heatley said steps were being taken to make homes more affordable, including changes to the Resource Management Act and Building Act.
"This research proves that many first home buyers are excluded from entering the property market by a number of factors, including restrictive zoning and consent laws, which not only make life difficult for ordinary Kiwis but are major factors in New Zealand's poor productivity and economic growth levels," he said.
The Government would be ensuring local councils improve the supply of suitable land zoned for new housing and make it easier to redevelop existing land.
The Government was also exploring ways to give banks the confidence to back projects.
The survey looks at the median house price divided by the gross annual median household income.
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Comments and questions3
I think that you should take a look at the following information which is an indepedent assessment of the study that you are reporting on.
www.shelternsw.infoxchange.net.au/docs/rpt08demographia-sb35.pdf
Demographia is owned by Wendell Cox, who has been described as ""itinerant anti-public transportation gun-for-hire." by the Sierra Club. He is principally opposed to city planners, smart city planning, public transport, etc. His Demographia blogspot contains this statement:
"Demographia is "pro-choice" with respect to urban development - People should have the freedom to live and work where and how they like."
He has been employed by various road-building groups over the years, and is a staunch defender of the suburbs, despite increasing concern over whether suburbs can survive the looming financial/energy crisis.
So his views need to be taken in context of the above, and his surveys are in-accurate as pointed out in the website above.
The recent articles published concerning the housing issues in New Zealand show a severe lack of independent, original or well-founded thought - instead focussing upon biased and opinionated viewpoints.
I am surprised at the vehemence the first two comments. Don't shoot the messenger. Instead argue the facts or logic. Demographia is only saying what some economists have said for years - house prices are fundamentally much more expensive than in the past.
The numbers and recent events point to a significant drop in prices over some period of time. I predict a 40 to 50% drop over 3 to 10 years after accounting for inflation.
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