New Zealand housing among world’s least affordable

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                                                                                                                                                                                   newshub.co.nz

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.

6 COMMENTS

  1. The problem with averages is they can be biased. Auckland is expensive but NZ is more than just auckland. I live in Whakatane which is a beautiful town. My wife and I bought a 3 bed house on a 700m section with big double garage etc etc for $330k. We worked like crazy before having kids and paid the mortgage off. I was 28 she was 27. We made a couple sacrifices but nothing too extreme. Now she’s a stay at home mum and I work part time and we are very comfortable. I hear the same old tired excuses about how impossible it is to buy a house in NZ (you know they’re meaning auckland not NZ). Or they fall for the same crap that Auckland is the only place with jobs. Hahaha good one.
    NZ is not unaffordable at all. Auckland is!

    • It’s not just Auckland, we live in Wairarapa, a lovely place to live, but the only reason we move here was because we couldn’t afford to buy any closer to Wellington and we commute into Wellington daily, now house prices here are climbing at crazy rates

  2. And the elephant in the room is all this foreign real estate money is really a form of money laundering, whether being hidden from the chinese government by employees of technically state owned enterprises, or drug money.
    Simple solution to the rentals crisis, if the house is vacant for more than six months state housing takes over and administers property.

    • It seems like wherever there are lots of jobs – that’s where the house prices are excessive. Might not be a bad thing if some of the big employers shifted some of their operations out into the regions? I wonder do they stay in or near the cities because of ports and freight costs?

  3. So in 2016 3% of all properties were bought by foreign investors. What about the other 97% or properties? I’m thinking that blaming it all on foreign investors is a bit illogical. Not that I wouldn’t like to see purchase of New Zealand land/houses by people who are not permanent residents or citizens stopped – but it seems to me that won’t make much difference either, there has to be something else going on.

  4. Personally I suspect that more and more people are investing in real estate, and this really pushes the price up. The more properties you have, the easier it is to borrow more to finance other ones. In the cities, the gradual move to higher density living means that every time a place come up for sale, if it is in a desirable area, the developers swoop on it, even if they can not develop the site immediately. They rent it out, and sit on it until they have enough properties in the area, and then develop. Unfortunately the consequences of these things are what we are seeing now.

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