Dave in Auckland

From today's Herald;

NZ houses among least affordable
Email this storyPrint this story Monday January 22, 2007
By Anne Gibson

New Zealanders are paying some of the world's highest house prices compared to our incomes and Auckland ranks alongside London as one of the world's most expensive housing markets.

The third Demographia International Housing Affordability Survey released today showed it takes Aucklanders 6.9 years of full annual earnings of $57,500 to afford the $395,000 median house price.

Dave in Auckland

EDIT: And don't forget that NZ interest rates are MUCH higher than in the UK.
So your mortgage will take a much larger chunk of your take home pay.

Maz

Being in the US, definitely not good news for selling NZ to my American hubby...

minky

When you walk and they know your English watch the price go up too!

Dave in Auckland

Yup that's true, and the reality is even worse. Houses in Auckland, Christchurch and Wellington are all less affordable than London.

lapsed kiwi

Funny then that greater London scores 9th on that survey whilst AKL is 21st and CHC and WGN don't feature at all. Care to add some figures to your statement?

Dave in Auckland

Because the survey just divides average house price by average salary and doesn't take the interest rate into account.

Dave in Auckland

OK, the following show;

Median house price, Median household income, Two-year fixed mortgage rate, Monthly mortgage payments, and in red the Percentage of income paid out to service a 95% mortgage

Sydney A$520,300 A$61,200 7.3% A$3,567 70%
Auckland NZ$395,000 $57,500 8.35% $2,995 62%
Vancouver Can$448,800 Can$58,100 6.4% Can$2807 57%
Christchurch NZ$291,000 NZ$48,400 8.35% NZ$2206 54%
New York US$477,700 US$66,600 6.12% US$2901 52%
Wellington NZ$331,000 NZ$61,400 8.35% NZ$2510 49%
Greater London £198,732 £28,802 5.4%. £1116 46.5%
Dublin euro354,000 euro61,900 4.1% euro1,710 33%

This is about affordability not house prices.

TeamEmbo

Does it take into account the type of housing? What does £198k buy in Greater London, compared to $221k in CCH? I mean if you can get a family home with garden in a nice location in CCH compared to an apartment you can't swing a cat in, or a mid-terrace you need metal shutters on in Greater London, isn't it worth paying an extra 7.5% of your income for a decent family home??

southerner

There are swings and roundabouts with what you get for your pound or dollar. In general kiwi homes have more garden, more indoor-outdoor flow, but are less well insulated. In some ways its horses for courses.

I reckon we got twice the house for half the price when we moved out 3 years ago, but we were downsizing cities (from London to Dunedin). For many kiwis housing affordability is a really big issue, and with the house market very prone to immigration flows, its only going to get worse.