Tauranga is the 8th most expensive city in the world

Hong Kong is the city with the most expensive real estate in the world, followed by Vancouver, Sydney, Melbourne, Santa Cruz, San Jose, Los Angeles… and then Tauranga. Yes, Tauranga, Bay of Plenty, New Zealand. You read that right. quote.

Tauranga has been named the eighth most expensive housing market in the world, heading off cities like London and San Francisco.
That’s according to a global study out today, the 15th annual Demographia International Housing Affordability Study, which measures average house prices against average income.

Tauranga residents have a median household income of $68,800 per year yet its houses are a median $623,000.
That means it would take locals just over nine years to pay off a house, if they poured every cent into their repayments. end quote.

Wait a minute. Tauranga does not have the 8th most expensive houses in the world. It has the 8th most expensive houses in the world in relation to the median incomes of its residents. That is quite different.

Let us not forget that a lot of retired people live in Tauranga. Median incomes are bound to be lower than average in a city full of retirees. These people made their money during their working lives and then sold up and brought their accumulated wealth to Tauranga. quote.

Economists have also noted in the years the Demographia study has been published that New Zealand has relatively low household income levels compared to many other countries and particularly those in the survey. end quote.

And now for the good news… quote.

Pavletich warns the Labour-led Government risks election defeat in 2020 unless it makes progress on affordable housing.

In the introduction to the survey results he warns it “will come as a shock” to the Government.
He goes on to say that the “New Zealand public and media will not tolerate political and institutional failure – something the previous government was taught at the 2017 election” end quote.

A Newspaper

Sorry to repeat myself ad nauseam, but the last government did not lose the election: they actually got the most votes. The election was gifted to the Coalition of Losers by Winston Peters. I really wish people would stop pretending the election result was a democratic one. quote.

Billed as? “the world?s largest known collection of housing affordability data at the housing market level”, the 2019 survey is the 15th in the series. It concentrates on what it calls ‘middle-income housing affordability’ rather than subsidised housing for low-income households and measures median house prices by median annual gross pre-tax household income.

On that basis, it finds Hong Kong has the world’s most unaffordable housing, with a ratio of median house price to median household income of 20.9 times. New Zealand is ranked second at nine times in ‘major housing markets’, although this drops to 6.5 times when measured across all housing markets in New Zealand. The major markets unaffordability in New Zealand is driven particularly by Auckland and Tauranga, ranked the eighth and ninth least affordable cities, with ratios of 9.1 and 9.0 respectively.

Sharechat end quote.

There is no doubt that there is some truth in this report, which generally blames a lack of urban land available for development as a prime cause of housing unaffordability. The report calculations should have been adjusted for the fact that Tauranga has a large number of superannuitants, which is obviously skewing the numbers.

Nevertheless, housing affordability is a huge issue in New Zealand, and it would be a delicious irony if this was the principal issue that brought down this shambolic government after only one term. It seems people are ‘locked out of the housing market’ under this government even more than they were under the previous one. That demonstrates how slogans and bumper stickers do not solve these problems. Only competent ministers can do that.