Is NZ suffering a housing affordability crisis?

According to the 2016 Demographia International Housing Affordability Survey, housing in eight of New Zealand’s main centres is “unaffordable”

The survey, which covered 367 metropolitan markets across nine countries, measures housing affordability using a median multiple – a ratio calculated by dividing median house prices by median household incomes.

New Zealand’s overall median multiple was 5.2, which is rated as “severely unaffordable”. Unsurprisingly, Auckland had the highest multiple of 9.7, with the median house price listed as $748,700 compared to a median household income of $77,500.

Internationally, it was ranked as the fourth most unaffordable market in the survey alongside Melbourne and San Jose in California.    

Palmerston North-Manawatu was the most affordable New Zealand market included in the survey, with a multiple of 4.1 earning it a “seriously unaffordable” rating.

The most affordable markets in the survey were Limerick and Rockford in Ireland, both with a median multiple of 1.8. Hong Kong was the most unaffordable, with a multiple of 19.0.