Kiwis are being priced out of NZ cities
Embargoed until 12.00am 20 January
18 January 2008
Its official, Kiwis are being priced out of New Zealand cities
Don’t own a home? Tough luck.
That seems to be the message from the New Zealand government and many local authorities, which continue to restrict the supply of land available for property development, according to Connal Townsend, Chief Executive of Property Council New Zealand.
“The 4th Annual Demographia International Housing Survey: 2008 continues to illustrate how New Zealand’s housing markets are severely unaffordable. However a worrying trend is emerging: New Zealand’s local housing markets are rapidly becoming some of the most severely unaffordable markets in the world.
“The latest Demographia survey lists Tauranga as the 20th least affordable market in the world, ahead of markets like Melbourne, Miami-West Palm Beach and Santa Barbara. Auckland (31st), Christchurch (34th), Hamilton (40th) and Wellington (46th) all make it into the top 50th, which demonstrates that New Zealand’s housing affordability crisis is now national crisis,” Connal Townsend said.
The methodology used by Demographia calculates the Median House Price to Median Household Income Multiple (Median Multiple). A Median Multiple of 5.1 or over means the housing market is severely unaffordable.
“The fact that five New Zealand housing markets have a Median Multiple of 6.1 or higher reconfirms the failure of the New Zealand government and its local government sector allies, who continue to contain land, thus creating artificial land-price inflation. Factor in other inflationary costs such as development contributions, increasing resource and building consent costs, and higher interest rates and one can quickly see why it has become so difficult for young New Zealanders in particular to buy their first house.
“Unfortunately the New Zealand government’s response to the current housing crisis is inadequate and will likely make the situation worse, not better. The Housing Affordability (Enabling Territorial Authorities) Bill will generate further compliance costs and provide disincentives to investors to increase the supply of housing to meet burgeoning demand,” Connal Townsend said.