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Auckland fourth least affordable housing market in nine countries

auckland_skyline.jpgAuckland's houses continue to rank amongst the most expensive on the face of the globe, in a relative sense at least, while Tauranga is not far behind

Auckland is the fourth least affordable housing market among 92 major cities in nine countries in the latest Demographia survey.

According to the survey, published on Monday, 10 times the median household income in Auckland is needed to buy a median-priced house, which cost $830,8100.

Among major markets, Auckland trails only Hong Kong, Sydney and Vancouver.

For Tauranga, the survey estimates it takes 9.7 times the median income - known as the median multiple - to buy a median-priced house at $591,900. It is up from 8.1 a year ago.

That makes Tauranga the eighth-equal - with Tweed Heads in Australia - most unaffordable among the total of 406 markets assessed in the survey.

Auckland is the sixth most expensive out of all markets.

Hamilton has a median multiple of 6.2 on a median price of $444,900, Christchurch is 5.9 on $435,300, Wellington 5.8 on $463,700, Napier-Hastings 5.7 on $340,500, Dunedin 5.4 on $322,000, and Palmerston North 4.7 on $255,800.

Prime Minister Bill English told RNZ that an answer to the increasing cost of housing was already happening in the form of changes to the Resource Management Act to make processes faster.

Auckland Council was "already starting to do what it's really starting to do quite well", which was "executing the processes fast, the building consents, the subdivisions consents".

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The government was also "cranking up its own building programme," English said.

ANZ senior economist Phil Borkin said the reason house prices are how they are was due to a huge range of factors, including strong demand from migration and housing supply being slow to pick up.

Therefore it was going to take more than a law change or any single thing to change the prices, he said.

A change in house prices would also take "numerous years" to take effect.

The results of the Demographia survey were unsurprising and were consistent with ANZ's research, which showed about nine times the average income was needed to buy a house in Auckland.

A new buyer would need to fork out 50 per cent of their disposable income to meet mortgage requirements, Borkin said.

The good news was that the properly market seemed to be cooling, if only slightly.

The survey said Auckland's median multiple had deteriorated from 5.9 in the first survey in 2004.

The countries in the survey are Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States.
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