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Super City affordability slides further

Auckland has been ranked the fourth least affordable city of the 92 major housing markets included in an international housing affordability survey.

Monday, January 23rd 2017, 12:00AM

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.”

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 4.30 4.20 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.45 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 11 November 2019 4:01pm

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