City homes 'unaffordable'

Christchurch is one of world's least affordable cities to buy property, according to a new housing survey.

The ninth Annual Demographia International Housing Affordability survey, released yesterday,[22/01] compared median house prices against median household income in different cities last year.

Christchurch homes were "severely unaffordable" with median house prices 6.6 times the city's median household income (median multiple) - rating it among the 30 most unaffordable property markets of 337 surveyed.

Real Estate Institute of New Zealand regional director Tony McPherson said Christchurch home buyers faced several challenges.

"Christchurch is a bit of a one-off situation with the quake.

"It is a sellers' market and there are a lot of buyers out there.

"They are some of the people who have been red-zoned and looking for a new property. We've also got people transferring into Christchurch because of the rebuild."

Meanwhile, construction in Christchurch had been relatively stagnant during the 10 years prior to earthquakes, he said.

Overall, the median New Zealand house price was 5.3 times the median household income last year.

Aucklanders paid the most - scoring a median multiple of 6.7 on the survey. Homes in Tauranga-Western Bay of Plenty (5.9), Wellington (5.4) and Dunedin (5.1) also rated as severely unaffordable.

Council of Trade Unions secretary Peter Conway said housing affordability was a "major crisis," but would not improve until New Zealand's ailing job market was addressed.

"It's a bit of a circular argument back to why are incomes too low and why are housing prices too high."

First-time home buyers were often worst-hit, he said.

"What it creates is insiders and outsiders - it becomes harder and harder for people to enter the housing market and get a good start."

None of New Zealand's eight surveyed metropolitan markets were deemed affordable, with Palmerston North (4.4), Napier-Hastings (4.5) and Hamilton (4.7) all ranked as seriously unaffordable.

Mr Conway said there was no easy solution to the affordability problem.

"It's not just your level of income, it's your security of income.

"With the huge increase in casual temporary work and fixed-term contracts, it's a lot harder for people to sign up and be able to commit to repayments if they are in a temporary job."

In the survey's introduction, Deputy Prime Minister Bill English said New Zealand's housing affordability problems were "conceptually simple".

"It costs too much and takes too long to build a house," he wrote.

Improving problem areas like land supply, infrastructure provision and regulatory delays would help make homes more affordable, he wrote.

Several commentators weighed in on the Government's housing policies yesterday[22/01].

Christchurch-based co-author Hugh Pavletich said housing affordability should have been addressed immediately after the 2008 election.