Auckland Housing Report Must Be Acted On
23 APRIL 2007
"CHRANZ MOTU Auckland Housing Report Must Be Acted On With Urgency"
The Centre for Housing Research Aotearoa New Zealand (CHRANZ) has released a 147 page Report prepared by Motu Economic and Public Policy Research (Motu) "Housing Supply in the Auckland Region 2000 - 2005". This comprehensive report clearly sets out the reasons for the artificial housing inflation within this urban market and provides sound and innovative solutions, in dealing with these problems.
The key issue is the artificial constraint on land supply. The CHRANZ Auckland Report found that over the decade to 2005, the median vacant section price across Territorial Local Authorities rose 108% in Manukau, 334% Auckland City, 329% Franklin and 315% within the Rodney District.
"This artificially created hyper inflation in land prices needs to be dealt with with urgency" said Hugh Pavletich, co author of the Annual Demographia International Housing Affordability Survey, adding "The CHRANZ Motu Report most importantly, provides sound, innovative and workable solutions to these problems. It is a great effort by all involved."
Wendell Cox of Demographia, co author of the Annual Demographia Survey and an international expert on urban issues, is of the view that the CHRANZ Report on the Auckland housing market, is one of the most significant reports on housing issues and will stimulate considerable international interest.
The internationally accepted standard for housing affordability is that median house prices should not exceeed three times median household incomes. The 2007 Demographia Survey found that Australia was (September 2006 data) 6.6 times, New Zealand 6.0, Ireland 5.7, United Kingdom 5.5. United States 3.7 and Canada 3.2 times household income.
Auckland was 6.9 times household incomes, with Christchurch 6.0 and Wellington 5.4.
"Unless something is done about land supply and associated issues urgently, Auckland house prices will likely hit nearly an appalling eight times household incomes by the end of this year, creating even worse hardship for people" said Hugh Pavletich.
Normal growing housing markets, such as the 41 identified within this years Demographia Survey, should move between 2.5 to 3.0 times household incomes through the building cycle. As the multiple increases. further housing construction is stimulated and as the demand and the Median Multiples moderate, construction should ease as well.