Houses getting less and less affordable despite the bursting bubble
Despite New Zealand’s parlous economic conditions, New Zealand housing is no more affordable now than it was before the economic wheels started falling off. In fact, according to the latest annual Demographia International Housing Affordability Survey housing in New Zealand is still severely unaffordable.
Author Joel Kotkin notes that even after the bursting of the housing bubble, the ratio of incomes to housing prices in most cities (what the researchers call “the median multiple”) has shown a steady increase.
The survey gave New Zealand a median multiple of 5.3 for housing affordability, which is above the historic norm of three.
All major [cities] in Australia and New Zealand, as well as Hong Kong, were judged to be severely unaffordable. Of the 325 [cities] the survey covered, 115 were affordable, 94 were moderately unaffordable, 42 were seriously unaffordable and 74 were severely unaffordable.
All of the affordable [cities] are in the United States. The most affordable is Atlanta, with a median house price of $US129,400 ($NZ170,485). Hong Kong was the least affordable major [city], with a median multiple of 11.4, Sydney second with a median multiple of 9.6 and Vancouver was 9.5.
New Zealand's housing was [rated as] affordable in the early 1990s, with a median multiple of under three, the survey said.
Auckland now has a median multiple of 6.4, with Christchurch on six and Wellington on 5.5, which is regarded as severely unaffordable. Tauranga-Western Bay of Plenty was again the least affordable market [in the country], with a median multiple of 6.5.
The reason some cities’ houses remain severely unaffordable while others do not (median house price of just $US129,400 in Atlanta!) remain the same, and may be described very simply: cities in which town planners have been given powers to seriously restrict house-building are generally the least affordable; those in which they have the least power are generally the most affordable.
Now you might have thought that Prime Minister John Boy might have been working since his election to turn around the dire situation in which even hard-working New Zealanders are finding it increasingly difficult to buy a house. But you’d be wrong. Instead, Smile and Wave’s local government minister Rodney Hide just spent the last two years working night and day not to remove power from the smug self-anointed vermin who have made life worse for would-be home-owners, but instead (as a model for councils across the country) to give Auckland’s town planners even more power to make the city even more severely unaffordable.
What a creep. What a disgrace. What a tragedy.
NB: You can download the detailed survey and related commentary at the Demographia website, from whence graphs and tables like these two below are sourced.
- ‘Smart Growth’ and the coming ‘Housing-Led Recovery’ – or, to put it another way: ‘Oxymorons for Morons’ – Oct 2009
- House price inflation on the rise again? – Aug 2009
- Tauranga planners' spin spiked by housing researchers - NOT PC, July 2008
- Why Houston housing has avoided boom and bust – NOT PC, May 2008
- WARNING: White noise on housing - NOT PC, Feb 2008
- Message to planners: Don't fence me in! – NOT PC, Feb 2007
- 'Smart Growth' is not Green – NOT PC, Oct 2007
- 'Sustainable' cities are unaffordable cities – NOT PC, June 2007
- More sprawling arguments – NOT PC, Feb, 2007
- Envy is making houses unaffordable – NOT PC, Feb 2007
- Some Auckland mayors realise ring-fencing the city is 'unsustainable' – NOT PC, Aug 2006
- Sprawl: A compact history- NOT PC, June 2006
- East Germany in East Auckland – NOT PC, June 2005
- Frank Lloyd Wright: Broadacre City – NOT PC, Nov 2005
- Decentralisation, and those who oppose it – NOT PC, Dec 2006
- Sprawl is good; regulation is not – NOT PC, Nov 2005
- Building slums while banning growth – NOT PC, June 200