According to The Economist, New Zealand’s housing market is officially among the least affordable in the world.
New Zealand comes top of three of five metrics measuring the most expensive housing market in the world.
New Zealand has had the biggest growth in house prices against the average person’s income, and now has the highest difference between house prices and renting prices. Numbers show that in the past 46 years New Zealand’s house prices have increased by more than 8% on average a year.
It is a trend repeated in countries including The United Kingdom, where 7.65% was the average rise annually over the same period, and Australia, rising 6.4% a year on average.
One reason is the growing number of rich foreigners buying in New Zealand as they consider it a “safe haven” for what many around the world perceive to be coming global instability.
In 2016 foreign investors bought 3% of all properties, but their purchases were mostly in the higher price range. Sales of homes that worth more than 1 million New Zealand Dollar increased by 21%.
Sadly for most New Zealanders, the average price of a property against a person’s income has risen steeply in the last 10 years.
The numbers are calculated by the Demographia International Housing Affordability Survey released in January, showing Auckland is ranked the fourth least-affordable housing market in the world.
The average house price in Auckland is now more than 1 million New Zealand Dollars.