Auckland has been ranked fourth out of ten in the global list of the most severely unaffordable housing markets, the 13th Annual Demographia International Housing Affordability Survey revealed, released this morning.
Hong Kong, Sydney and Vancouver were the top three least affordable cities, with their rankings below including house price/household income multiple.
1. Hong Kong $5,422,000 $300,000 18.1
2. Sydney $1,077,000 $88,000 12.2
3. Vancouver $830,100 $70,500 11.8
4. Auckland $830,800 $83,000 10
The New Zealand Initiative has responded to the survey and urges the Government to make the housing crisis top of the political agenda in 2017.
The Initiative’s head of research Dr Eric Crampton says, “San Francisco is an American poster-child for housing unaffordability. It is hemorrhaging people and jobs to cities with sensible land use planning and affordable housing. And now Auckland is even more unaffordable than San Francisco.”
“Fixing infrastructure financing and letting Councils better share in the benefits of urban growth has to be at the top of the policy agenda if New Zealand wants affordable housing.”
The Initiative says through its research, their recommendations are aimed at making housing affordable again, as well as developing a strategy to ensure supply can keep up with growing demand.
It suggests a combination of the following:
• A relaxation on height and density restrictions
• The abolition of the Rural Urban Boundary
• Alternative ways of funding urban infrastructure such as Municipal Utility Districts
• Financial incentives for councils to increase the housing supply, such as keeping the GST component of every new development project
Property Council chief executive Connal Townsend has also said the super city’s housing affordability could be helped by opening up more development land.
"I am not in the least surprised that Auckland has slipped to fourth in the ranking," he told the NZ Herald.
"For over a decade, we have led a campaign to change the way local government operates in the housing sector. Auckland is still burdened with the poor housing policy decisions affecting land supply that were established well before Auckland Council came into effect.
"These historical policy decisions throttled the supply of developable land both by means of an urban metropolitan limit and generalised public opposition to the provision of greater density," Townsend said.
"Public policy improvements have been achieved under the Auckland Unitary Plan, but the plan is yet to become fully operative and there are some ratepayers still fighting to prevent the adequate provision of housing to meet our city's needs. Some fear apartments going up next to them, some fear urban sprawl and some fear the loss of heritage buildings. While these fears are understandable, this approach will only exacerbate poverty and undermine the opportunities for people wanting to live and work in Auckland.
"Until the property sector gets the green light to provide adequate housing the cost of housing will continue to climb. We don't anticipate any significant improvement in Auckland housing unless supply matches demand."