Despite the horror stories on the news about Auckland’s insane and rapidly rising housing prices, and Nick Smith’s increasing pressure on Auckland’s mayor and council to fix this, Auckland is not the most expensive city in the world in which to buy a house.
The most expensive city in the world in which to buy a house—not even a house, just a shoebox—is Hong Kong*. The median price for your shoebox in Hong Kong is HK$3,810,000, which with a median Hong Kong income of HK$282,000 makes that a multiple (what housing researchers call a “Median Multiple”) of 13.5.
In other words, it costs the fellow in Hong Kong 13.5 times the median HK income to buy his median HK shoebox.
That doesn’t leave much left over for nightclubbing and champagne.
There are some good reasons for this sort of (let’s face it) way-out Hong Kong price tag: challenging topography, huge mainland demand, and a govt housing department responsible for most of the house building being just three of those reasons.
(But compare this multiple of 13.5 to, for example, Atlanta, Georgia, whose residents luxuriate in a Median Multiple of just 2.0! Just twice the median income to buy the median house, and lots of your salary left over to enjoy what’s considered one of America’s most liveable cities.)
So Auckland is not the most expensive city in the world. But with a Median Multiple of nearly 7, it’s way more expensive than Atlanta. It’s more expensive than Los Angeles. More expensive even than Greater New York. More expensive, in these terms, than Washington DC and Boston. More expensive (to quote just a few of the world’s great English-speaking cities) than Montreal, Seattle, Toronto, San Diego, Miami, Dublin, Chicago, Portland, Perth, Brisbane, Adelaide, Edinburgh, Houston, Las Vegas …
In fact, the only great English-speaking cities that are more expensive in which to buy a house (as measured by the Median Multiple) are Greater London (but with a Median Multiple of 7.8, only just!), Melbourne (7.5), San Francisco(7.8), Sydney (8.3), Vancouver (9.5) and our old friend Hong Kong. And those places house far more people than we do.
So we’re doing something wrong. Something very, very wrong.
Auckland is not the world’s most unaffordable city, but it’s damned close.
And until Mayor Len Brown and his council realise that one of the chief means by which a city is made one of the world’s most truly liveable cities is that it’s affordable to actually live there, we (and by “we” I mean Aucklanders, would-be Aucklanders, and everyone else in the country whose savings are going into lending the money for Aucklanders to buy these houses) are all going to continue suffering.
It’s too late for excuses. Until Brown and his crowd take up the call to begin making Auckland one of the world’s most affordable cities, and to do everything necessary to make that possible, we’ll all lose.
* All the Median Multiples quoted here come from the2013 Demographia International Housing Affordability Survey. And the measures for “most liveable cities” come from the 2012 Mercer Quality of Living Worldwide City Rankings Survey.