Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Demographia Int. Housing Affordability Survey

2006

2nd Annual Edition

Demographia International Housing Affordability Survey

United Kingdom Republic of Ireland

United States Canada

Australia New Zealand

How does your city Rate? Trends and Why.

*****************************

“Land Supply Strangulation Major Cause Of Housing Affordability Crisis” – Demographia Survey

The 2nd Edition of the Demographia International Housing Affordability Survey expands coverage to the United Kingdom and the Republic of Ireland, together with the nations included in the first edition, Australia, Canada, New Zealand and the United States.

The Survey authors are Wendell Cox of the Wendell Cox Consultancy ( Demographia ) , St Louis, Illinois, USA and Hugh Pavletich, Pavletich Properties Ltd, Christchurch, New Zealand.

The Survey rates the affordability of the one hundred major urban property markets of the six nations covered, using the Median Multiple approach. This identifies the median household income and the median house price of all these individual urban areas and expresses the affordability, by the number of years median household income, it would take to purchase the median priced house. This is termed the Median Multiple.

This Survey, in using this Median Multiple approach, is unique in providing standardized comparisons of affordability, within nations and internationally. It clearly sets out why well governed urban markets achieve a Median Multiple of three (3) or below. This means that median house prices should not be any more than three times median household incomes.

Affordable markets have a Median Multiple Rating of 3 or less; moderately unaffordable markets a rating of 3.1 to 4; seriously unaffordable markets 4.1 to 5.0 and severely unaffordable markets 5.1 and above.

Of the six countries and one hundred major urban property markets covered, 24 are affordable, 23 moderately unaffordable, 11 seriously unaffordable and 42 severely unaffordable.

All the major urban property markets of New Zealand are severely unaffordable, as is the major city of the Republic of Ireland, Dublin. Of the Australian urban markets, six are severely unaffordable, with two being seriously unaffordable. The United Kingdom has just one moderately unaffordable market, with the other eleven being severely unaffordable. Canada has three affordable, four moderately unaffordable, one seriously unaffordable with Vancouver being severely unaffordable. The huge and diverse United States has twenty one affordable markets, eighteen moderately unaffordable markets, eight seriously unaffordable and twenty severely unaffordable urban markets.

All the affordable markets are in North America, with three in Canada and twenty one in the United States. There are no affordable major urban property markets in the United Kingdom, Ireland, Australia and New Zealand.

New and existing house sizes differ significantly among the countries surveyed. The average new house size in Australia and the United States is about 2,200 square feet, Canada and New Zealand 1,900 square feet and both the United Kingdom and Ireland an extraordinarily low 815 square feet and 930 square feet respectively. New British housing is now only 15% larger than the former East German slab developments, of which one million have been vacated, since the reunification of East and West Germany.

Whilst these house size differences are not included within the Ratings of the Survey, the issue is discussed and illustrated within the Survey Commentary. The British and Irish housing stock is comparatively extremely highly priced and of a poor standard.

The 2006 Demographia International Housing Affordability Survey illustrates how affordable most urban markets of the countries surveyed were five, ten and twenty years ago. Its findings suggest that the major cause of the loss of affordability within these markets is due to artificially strangled land supply.

Mr Cox expressed the view that this Survey will be of interest to emerging economies in particular, as they are in the process of installing and refining land use regulatory regimes that work best.

“Irelands spectacular growth has been based on sound economic policies and is something to be admired” said Mr Cox adding “But the Irish people have been denied housing that befits their incomes. Must of the reason is over-regulation of land. There are similar problems in Britain.”

He concluded “The emerging nations of Eastern Europe and Asia would do well to avoid these mistakes by allowing the market to provide the best housing possible, built where people want to live. There’s no reason to do otherwise.”

The co author of the Survey Hugh Pavletich, is of the opinion that it is up to communities themselves to take responsibility for dealing with housing affordability and ensuring that they achieve Median Multiples of three or below, within a reasonable time.

“The Demographia International Housing Affordability Survey provides a guide and readily understood measure, for communities themselves to work together, in exploring solutions to this serious issue.” said Mr Pavletich, adding “ Good quality and abundant housing can only happen from a foundation of good quality governance and communities that care”.

Access to -

2006 2nd EDITION DEMOGRAPHIA INTERNATIONAL HOUSING AFFORDABILITY SURVEY

http://www.demographia.com/dhi-ix2005q3.pdf

www.demographia.com

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news