23 Jan 2012

NZ high on unaffordable housing list

9:10 pm on 23 January 2012

New Zealand ranks high on a worldwide scale for unaffordable housing.

The latest International Housing Affordability survey from Demographia, a company in the United States, shows New Zealand has no affordable housing markets.

The survey looked at eight housing markets in New Zealand, with Palmerston North ranked as the most affordable and Auckland the least.

Demographia says the basis of the survey is that houses should not cost more than three times a person's annual income.

In New Zealand, it says, the cost is at least four times - and six times in Auckland and Christchurch.

The survey's co-author Hugh Pavletich attributes this to a lack of affordable land on city fringes.

He says it is particularly bad in his home town of Christchurch, where cheap land should have been freed up immediately after the September 2010 earthquake.

It's particularly sad here in Christchurch where people are suffering real hardship and trying to readjust their lives and get back on their feet and the government is jut being, quite frankly, callous in ignoring the plight of these people, he says.

Housing minister Phil Heatley says costs of housing could be brought down if councils made cheap land available on city fringes for new suburbs and ensured land could be redeveloped, including through increased housing density.

However, Local Government New Zealand president Lawrence Yule says it is not as simple as just providing more land and other factors such as the cost of materials and construction have also contributed to the increase in housing prices.

The Demographia survey covers 325 metropolitan centres in Australia, Britain, Canada, Hong Kong, Ireland, New Zealand, and the United States. All prices are listed in the domestic currency.

Auckland ranks as the 26th least affordable at $NZ464,000, with the average income only $NZ72,000.

In addition to Auckland and Christchurch, other New Zealand cities high on the list are Tauranga, Dunedin and Wellington.

They beat cities like Montreal in Canada, Canberra and Seattle, USA.

Hong Kong, Vancouver and Sydney are the top three least affordable cities, with homes there costing between nine and 12 times' average incomes.

The cheapest place to buy is in Saginaw, Michigan, USA, with the average house there costing $US56,000.