Auckland among least affordable cities in world


The Government is being urged to change Auckland planning rules, after a new report found it's the fourth most expensive place in the world to buy a house.

While Auckland homes have always been classified as unaffordable in every Demographia Housing Affordability survey, the city has jumped from ninth to fourth in the global rankings in just one year, according to the latest report released today.

ACT Party leader David Seymour says the report is a reminder of how the Government has not done enough to fix a dysfunctional housing market.

Immigrants were not to blame for the high prices, he said.

In the 1990s, 50,000 homes were built in Auckland, but in the past decade only 40,000 were built, he said.

"That is despite home buyers paying record high prices and the population being 50 percent larger than it was in 1991."

He recommended the government ban the use of city limits such as the Rural Urban Boundary.

Auckland Ratepayers' Alliance spokeswoman Jo Holmes said Auckland Council's planning rules relied too much on discretion and uncertainty.

Mana Whenua provisions in the Unitary Plan required Aucklanders to pay iwi for `cultural impact' sign-off for sites "the council didn't even bother to check exist", she said.

The survey examines 378 cities world-wide and measures house prices against annual wages to give a median multiple number. Anything ranked above three is considered unaffordable.

Auckland has a median house price of $738,700 while median income is $77,500 giving it a house price-wage multiple of 9.7.

"Historically, the median multiple has been remarkably similar in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States, with median house prices from 2.0 to 3.0 times median household incomes," the report said.

"However, in recent decades, house prices have been decoupled from this relationship in a number of markets, such as Vancouver, Sydney, San Francisco, London, Auckland and others."

But the report does praise New Zealand's government for their intervention efforts.

The New Zealand housing market as a whole had a median multiple of 5.2, third highest in the world behind Australia and Hong Kong, with six of the eight cities surveyed considered severely unaffordable.

Wellington and Dunedin came in with a house price-wage multiple of 5.2, Christchurch, 6.1, Hamilton, 5.1, Napier-Hastings, 5, and Palmerston North, 4.1.

THE WORLD'S LEAST AFFORDABLE CITIES (at least 1 million inhabitants):

1. Hong Kong, China - 19.0

2. Sydney, Australia - 12.2

3. Vancouver, Canada - 10.8

4. Melbourne, Australia - 9.7

4. Auckland , New Zealand - 9.7

4. San Jose, United States - 9.7

7. San Francisco, United States - 9.4

8. London, United Kingdom - 8.5

9. Los Angeles, United States - 8.1

9. San Diego, United States - 8.1

Source: Demographia