The Prime Minister hopes Nick Smith will supercharge the housing market, and it can't come soon enough for many struggling to buy a home.
An international study has found housing here is becoming more unaffordable than ever.
Hugh Pavletich lives in “severely unaffordable” Christchurch – that's how it's ranked in the latest International Housing Affordability Survey.
As co-author of the Demographia report, Mr Pavletich has first-hand experience of the numbers he's crunched.
“Coming up to the 2008 election, the Government had promised it would get onto the issue but failed to do so,” he says. “It's become so intolerable now that they are really forced to act.”
That is why John Key hopes Dr Smith can come up with some fresh ideas.
“I'm very conscious of the fact it's a very complex issue and I need a minister with the sort of energy that Nick has got,” says Mr Key.
“The Government is doing nothing in the housing market,” says Labour Party leader David Shearer. “They need to build affordable houses so first time buyers can actually have a chance of getting into a house.”
Dr Smith is replacing a surprised and disappointed Phil Heatley, whose time in charge of housing has ended, with affordability getting worse.
The Demographia survey ranks affordable homes as those costing less than three times annual household earnings. At the other end of the scale, severely unaffordable homes start at 5.1.
New Zealand is at 5.3. That's third in the table of seven, behind Hong Kong and Australia.
“The biggest problem that we have in New Zealand is the lack of affordable land supply for housing,” says Mr Pavletich. “We need to open up the fringes of all our cities to get the land prices back down.”
Auckland has the worst market, at 6.7 times annual household earnings, followed by Christchurch, Tauranga, Wellington, then Dunedin.
If you're looking for the most affordable place to live in the survey, you'll need to move to Detroit or Evansville in the United States. Perhaps a fact-finding trip over there should be top of Dr Smith's to do list.
3 News
source: newshub archive
