Auckland stays near top of unaffordable list - Check out Hong Kong
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Auckland stays near top of unaffordable list - Check out Hong Kong
An author of an international housing affordability survey that lists Auckland as one of the most unaffordable cities in the world says he has never been more confident that the trend in New Zealand was about to change.
The ninth Annual Demographia International Housing Affordability Survey has found housing in New Zealand has become slightly more unaffordable in the last year, with median house prices now 5.3 times the median income (median multiple), up from 5.2.
All eight of New Zealand's property markets were "seriously" or "severely" unaffordable and London, New York and Los Angeles are all ranked more affordable than Auckland.
Hong Kong, China is the most unaffordable place to buy a house, with a median multiple of 13.5.
Christchurch-based co-author Hugh Pavletich said the Government was "now very strongly committed to doing what's necessary to start getting affordable housing built".
Pavletich said he had never been more confident something was being done about housing affordability since he started the annual Demographia survey in 2005.
However, Pavletich said the Government should have been "onto this issue" immediately after the 2008 election.
Housing affordability has now "gotten intolerable" and majority of New Zealanders want to see change, he said.
"This is the most confident I've been that there is actually going to be some change," he said.
Auckland continues to be the least affordable market, with a median multiple of 6.7, followed by Christchurch (6.6), Tauranga-Western Bay of Plenty (5.9), Wellington (5.4) and Dunedin (5.1) all severely unaffordable.
Palmerston North (4.4), Napier-Hastings (4.5) and Hamilton (4.7) are all ranked as seriously unaffordable.
Auckland is still more affordable than Australian cities Sydney (8.3) and Melbourne (7.5), but less affordable than Adelaide (6.5), Perth (5.9) and Brisbane (5.8).
Houses are now nearly 80 per cent more expensive than the historic affordability housing norm of 3 times the median income, which was last experienced in the 1990s.
Deputy Prime Minister Bill English, the Minister for Infrastructure, says the issue is "simple": "It costs too much and takes too long to build a house in New Zealand."
English, who wrote the introduction to the recent Demographia survey, said the Government was committed to addressing the findings by last year's Productivity Commission report on housing affordability.
He said the Government's focus was on "land supply, infrastructure provision, costs and delays due to regulatory processes and improve construction sector productivity".
Green Party co-leader Metiria Turei said the report was "proof that the housing market is broken and that major government action is needed".
"Under National and previous governments, home ownership has become an unaffordable dream for many Kiwi families but it doesn't need to be that way," she said.
"Kiwi families need a government that will act, rather than play the part of a disinterested bystander."
Turei said Green policies, including a capital gains tax, would "remove speculators from the housing market and give families a fair chance of buying a home at an affordable price".
The affordability report points to urban containment policies, especially urban growth boundaries, as being responsible for the rising price of housing relative to income.
"This inevitably leads to a reduced standard of living and increases poverty rates because the unnecessarily higher costs of housing leave households with less discretionary income to spend on other goods and services," the report says.
"The higher costs ripple into rental markets, tightening the budgets of lower income households, who already suffer from lower discretionary incomes."
Affordability around the world:
Housing market, median multiple
Hong Kong, China, 13.5
Sydney, Australia, 8.3
Melbourne, Australia, 7.5
Auckland, New Zealand, 6.7
Adelaide, Australia, 6.5
New York, US, 6.2
Los Angeles, US, 6.2
Perth, Australia, 5.9
Brisbane, Australia, 5.8
London, United Kingdom, 5.1
Dublin, Ireland, 3.6
Source: Annual Demographia International Housing Affordability Survey
(Median multiple represents the median house price divided by the median income)
- APNZ
The ninth Annual Demographia International Housing Affordability Survey has found housing in New Zealand has become slightly more unaffordable in the last year, with median house prices now 5.3 times the median income (median multiple), up from 5.2.
All eight of New Zealand's property markets were "seriously" or "severely" unaffordable and London, New York and Los Angeles are all ranked more affordable than Auckland.
Hong Kong, China is the most unaffordable place to buy a house, with a median multiple of 13.5.
Christchurch-based co-author Hugh Pavletich said the Government was "now very strongly committed to doing what's necessary to start getting affordable housing built".
Pavletich said he had never been more confident something was being done about housing affordability since he started the annual Demographia survey in 2005.
However, Pavletich said the Government should have been "onto this issue" immediately after the 2008 election.
Housing affordability has now "gotten intolerable" and majority of New Zealanders want to see change, he said.
"This is the most confident I've been that there is actually going to be some change," he said.
Auckland continues to be the least affordable market, with a median multiple of 6.7, followed by Christchurch (6.6), Tauranga-Western Bay of Plenty (5.9), Wellington (5.4) and Dunedin (5.1) all severely unaffordable.
Palmerston North (4.4), Napier-Hastings (4.5) and Hamilton (4.7) are all ranked as seriously unaffordable.
Auckland is still more affordable than Australian cities Sydney (8.3) and Melbourne (7.5), but less affordable than Adelaide (6.5), Perth (5.9) and Brisbane (5.8).
Houses are now nearly 80 per cent more expensive than the historic affordability housing norm of 3 times the median income, which was last experienced in the 1990s.
Deputy Prime Minister Bill English, the Minister for Infrastructure, says the issue is "simple": "It costs too much and takes too long to build a house in New Zealand."
English, who wrote the introduction to the recent Demographia survey, said the Government was committed to addressing the findings by last year's Productivity Commission report on housing affordability.
He said the Government's focus was on "land supply, infrastructure provision, costs and delays due to regulatory processes and improve construction sector productivity".
Green Party co-leader Metiria Turei said the report was "proof that the housing market is broken and that major government action is needed".
"Under National and previous governments, home ownership has become an unaffordable dream for many Kiwi families but it doesn't need to be that way," she said.
"Kiwi families need a government that will act, rather than play the part of a disinterested bystander."
Turei said Green policies, including a capital gains tax, would "remove speculators from the housing market and give families a fair chance of buying a home at an affordable price".
The affordability report points to urban containment policies, especially urban growth boundaries, as being responsible for the rising price of housing relative to income.
"This inevitably leads to a reduced standard of living and increases poverty rates because the unnecessarily higher costs of housing leave households with less discretionary income to spend on other goods and services," the report says.
"The higher costs ripple into rental markets, tightening the budgets of lower income households, who already suffer from lower discretionary incomes."
Affordability around the world:
Housing market, median multiple
Hong Kong, China, 13.5
Sydney, Australia, 8.3
Melbourne, Australia, 7.5
Auckland, New Zealand, 6.7
Adelaide, Australia, 6.5
New York, US, 6.2
Los Angeles, US, 6.2
Perth, Australia, 5.9
Brisbane, Australia, 5.8
London, United Kingdom, 5.1
Dublin, Ireland, 3.6
Source: Annual Demographia International Housing Affordability Survey
(Median multiple represents the median house price divided by the median income)
- APNZ
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That living here is exceedingly expensive and getting worse daily
Taxi fares to go up, Supermarket prices constantly getting more expensive,
Housing is at impossible levels. Electricity going up, Petrol is near record levels
The only thing that isn't going up is my salary, Well its about time that changed
Taxi fares to go up, Supermarket prices constantly getting more expensive,
Housing is at impossible levels. Electricity going up, Petrol is near record levels
The only thing that isn't going up is my salary, Well its about time that changed
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Taxi fares?? Are you serious??!!!
****, they could triple and still be considered reasonable.
Well said Messiah.
Anyway, the majority of Hong Kongers love this sort of notoriety. Almost a status symbol.
****, they could triple and still be considered reasonable.
Well said Messiah.
Anyway, the majority of Hong Kongers love this sort of notoriety. Almost a status symbol.
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Not the only good thing
Yeah, well the only good thing about Auckland is that its got a motorway running straight through it!
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Eventually the property market in Hong Kong will correct. Probably when interest rates go up maybe sooner. When it does happen you will have lots of people trying to run for the same exit at the same time.
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Bring it on I say. Property prices are criminal right now, propped up only by Bernanke and his bankster buddies, they exist on a bubble of thin air.
Hong Kong is the ultimate in elitist mentality, people are only here to get rich quick, monkeys in suites selling derivatives that are backed by only the willingness of the FED to print non existent 1 and 0's out of the ether. What with the lowliest of low finance type expats coupled with the ultra materialistic Mainland-Chinese money is God mentality and what are we left with but a seething puss of effluence and a city built upon greed, avarice and corruption.
Hong Kong is the ultimate in elitist mentality, people are only here to get rich quick, monkeys in suites selling derivatives that are backed by only the willingness of the FED to print non existent 1 and 0's out of the ether. What with the lowliest of low finance type expats coupled with the ultra materialistic Mainland-Chinese money is God mentality and what are we left with but a seething puss of effluence and a city built upon greed, avarice and corruption.
Last edited by Threethirty; 23rd Jan 2013 at 15:27.
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330,
Agree with your post, but nobody is forcing Hong Kong to tie its dollar to the USD. So don't blame the US when it all comes crashing down. The Fed adjusts its monetary policy based on the needs of the US... Not Hong Kong!
Agree with your post, but nobody is forcing Hong Kong to tie its dollar to the USD. So don't blame the US when it all comes crashing down. The Fed adjusts its monetary policy based on the needs of the US... Not Hong Kong!
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I agree to some extent but I would substitute what you said about the Fed basing it's policy on what it is good for the US for the FED inventing policy for what is good for the global banking sector.
Hong Kong will always align with the dollar for as long as we're alive, it still doesn't take away some of the blame from the US and more specifically unelected Federal Reserve bankers for spending it's/their way into oblivion and for committing trillions upon trillions in cocaine QE money for bankers to gamble with in London, NYC and Hong Kong, which in turn has the unintended or perhaps intended consequence of driving up risk "assets"; which happens to include Hong Kong property.
This Is What 1,230 Days (And Counting) Of Explicit Market Support By The Federal Reserve Looks Like | Zero Hedge
Hong Kong will always align with the dollar for as long as we're alive, it still doesn't take away some of the blame from the US and more specifically unelected Federal Reserve bankers for spending it's/their way into oblivion and for committing trillions upon trillions in cocaine QE money for bankers to gamble with in London, NYC and Hong Kong, which in turn has the unintended or perhaps intended consequence of driving up risk "assets"; which happens to include Hong Kong property.
This Is What 1,230 Days (And Counting) Of Explicit Market Support By The Federal Reserve Looks Like | Zero Hedge
Last edited by Threethirty; 23rd Jan 2013 at 18:04.
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330,
I certainly agree that banking sector health is considered by the Fed, but do you disagree that the current Fed monetary policy has more to do with deficits and debt than making the fat cats fatter? The Fed realizes correctly that US government borrows nearly half of every dollar it spends. Annual deficits are nearly 1 trillion. The US government's debt is now more than its GDP. How do you think a government finances this type of crime against its own people? Can you imagine how much worse the fiscal crisis would be if the Fed put rates higher or didn't have massive monthly bond auctions?
The problem in the US is not the Fed. The problem is spending. No amount of realistic taxation could cover the government outlays. Everybody talks about the Fed as if they are to blame. We should look no further than the Obama administration and Congress for perpetuating a massive fraud against the people. Balance the budget, start paying down debt, and the Fed policies will return to more reasonable levels... As will property in Hong Kong and inflated markets around the world.
I certainly agree that banking sector health is considered by the Fed, but do you disagree that the current Fed monetary policy has more to do with deficits and debt than making the fat cats fatter? The Fed realizes correctly that US government borrows nearly half of every dollar it spends. Annual deficits are nearly 1 trillion. The US government's debt is now more than its GDP. How do you think a government finances this type of crime against its own people? Can you imagine how much worse the fiscal crisis would be if the Fed put rates higher or didn't have massive monthly bond auctions?
The problem in the US is not the Fed. The problem is spending. No amount of realistic taxation could cover the government outlays. Everybody talks about the Fed as if they are to blame. We should look no further than the Obama administration and Congress for perpetuating a massive fraud against the people. Balance the budget, start paying down debt, and the Fed policies will return to more reasonable levels... As will property in Hong Kong and inflated markets around the world.
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Because nothing in this world is free, even if you control the printing press. Somebody has to pay. When we print money, we dilute the wealth of those who have cash. It might as well be a tax, but the printer is much more palatable politically.
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I do blame the Fed because they are printing money out of thin air to buy treasuries which they purchase via the banks, the banks in turn make a healthy profit off this trade. Importantly the Fed is not Federal at all but is actually owned by the banks themselves. So in essence the private banks and the Fed are encouraging spending because it increases the profits for the banking sector.
If the Central bank and it's magical printing press didn't exist the US would be forced to reign in it's spending. This is not a chicken and egg scenario, the Fed brought about the end of traditional banking, encouraged leverage and fractional reserve lending. In the past the US was always able to balance it's books until the likes of Greenspan and Bernanke came along. In this regard, it is fairly obvious to me that this rash spending spree didn't happen without some support from both the Fed and the Treasury, the latter of which is headed up by none other than Matt Zames a JPMorgan banker, as the yanks say, Go Figure!
Spending does not help ordinary people, as you've said yourself future generations will have to pay and by not taking action now the inevitable crash will be much harder and more disastrous than if we took the medicine immediately.
What needs to happen is the complete opposite of what you have said. Firstly interest rates need to rise, it encourages saving as opposed to gambling and spending both of which created the mess we're in now. The only beneficiaries of low interest rates are Investment banks and Governments. Investment banks borrow money for nothing, which encourages extreme leverage and gambling activity, this leads to a reluctance to lend money to people on the street for mortgages. They earn more money from creating immoral and fraudulent derivatives than doing what they're supposed to be doing as traditional banks.
You mentioned that the resulting crash would have been more severe had the Fed not stepped in, I beg to differ. What you are seeing right now is a full blown depression, unemployment in the US is more like 22%, the official figures are bogus. People are mistaking the strength of the stock market for a sign of recovery, this is evidently not true, the number of people on food stamps in the US has grown exponationally! The only difference between this depression and the last one is that there are no food queues, they are now in the form of food stamps! If we had done the right thing by punishing the banking sector and written off the bad debt we would of had a short sharp recession followed by a boom. If you have any doubt on this just look at what happened in Iceland, they did all this and are now flourishing, an example for all right-minded people who care to notice.
By advocating more of the same failed monetary policy such as rampant spending, Quantitive easing and low interest rates the US and the rest of the Global economy will limp along in zombie like fashion. Spending will keep on increasing, inflation will skyrocket, jobs will hemorrhage, banker fraud and corruption will thrive even more and illegal wars of an Imperialistic nature will continue to be fought. By doing what is right such as increasing interest rates, reinstalling a spirit of capitalism by letting corrupt institutions fail and not rewarding fraud and crime; we are more likely to see a return to solid growth and an environment more in favour of enterprise and entrepreneurship, not to mention a realistic value for HK property! If you get the time I suggest you might want to read this below.
Guest Post: The Global Economic Disease In 8 Points And The Cure In 4 Points | Zero Hedge
FleeceBook: Meet JP Morgan's Matt Zames | Zero
Hedge
Learning A Harsh Lesson | Zero Hedge
It's Official: Worst. Recovery. EVER | Zero Hedge
If the Central bank and it's magical printing press didn't exist the US would be forced to reign in it's spending. This is not a chicken and egg scenario, the Fed brought about the end of traditional banking, encouraged leverage and fractional reserve lending. In the past the US was always able to balance it's books until the likes of Greenspan and Bernanke came along. In this regard, it is fairly obvious to me that this rash spending spree didn't happen without some support from both the Fed and the Treasury, the latter of which is headed up by none other than Matt Zames a JPMorgan banker, as the yanks say, Go Figure!
Spending does not help ordinary people, as you've said yourself future generations will have to pay and by not taking action now the inevitable crash will be much harder and more disastrous than if we took the medicine immediately.
What needs to happen is the complete opposite of what you have said. Firstly interest rates need to rise, it encourages saving as opposed to gambling and spending both of which created the mess we're in now. The only beneficiaries of low interest rates are Investment banks and Governments. Investment banks borrow money for nothing, which encourages extreme leverage and gambling activity, this leads to a reluctance to lend money to people on the street for mortgages. They earn more money from creating immoral and fraudulent derivatives than doing what they're supposed to be doing as traditional banks.
You mentioned that the resulting crash would have been more severe had the Fed not stepped in, I beg to differ. What you are seeing right now is a full blown depression, unemployment in the US is more like 22%, the official figures are bogus. People are mistaking the strength of the stock market for a sign of recovery, this is evidently not true, the number of people on food stamps in the US has grown exponationally! The only difference between this depression and the last one is that there are no food queues, they are now in the form of food stamps! If we had done the right thing by punishing the banking sector and written off the bad debt we would of had a short sharp recession followed by a boom. If you have any doubt on this just look at what happened in Iceland, they did all this and are now flourishing, an example for all right-minded people who care to notice.
By advocating more of the same failed monetary policy such as rampant spending, Quantitive easing and low interest rates the US and the rest of the Global economy will limp along in zombie like fashion. Spending will keep on increasing, inflation will skyrocket, jobs will hemorrhage, banker fraud and corruption will thrive even more and illegal wars of an Imperialistic nature will continue to be fought. By doing what is right such as increasing interest rates, reinstalling a spirit of capitalism by letting corrupt institutions fail and not rewarding fraud and crime; we are more likely to see a return to solid growth and an environment more in favour of enterprise and entrepreneurship, not to mention a realistic value for HK property! If you get the time I suggest you might want to read this below.
Guest Post: The Global Economic Disease In 8 Points And The Cure In 4 Points | Zero Hedge
FleeceBook: Meet JP Morgan's Matt Zames | Zero
Hedge
Learning A Harsh Lesson | Zero Hedge
It's Official: Worst. Recovery. EVER | Zero Hedge
Last edited by Threethirty; 25th Jan 2013 at 19:43.
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330,
You wrote a bunch, and I'm not going respond to all of it because I'm similar to most typical Americans in that I have a short attention span. However, I agree with much of what you wrote. That said, I DO think this is a typical chicken and egg situation. Which is cause and which is effect? Is the Fed the problem in that it enables government over-spending OR is the over-spending government the problem in that it forces the Fed to adopt ridiculous monetary policies just to preserve the "integrity" of the federal credit rating? Honest question???
Isn't the root problem that the American electorate wants to have its cake and eat it too? Yanks now want Euro-style government benefits and low taxes all at the same time. In my mind, it's decision time... Slow growth, high taxes, and high unemployment with a large social safety net; or low taxes, low unemployment, higher growth, and less welfare.
You wrote a bunch, and I'm not going respond to all of it because I'm similar to most typical Americans in that I have a short attention span. However, I agree with much of what you wrote. That said, I DO think this is a typical chicken and egg situation. Which is cause and which is effect? Is the Fed the problem in that it enables government over-spending OR is the over-spending government the problem in that it forces the Fed to adopt ridiculous monetary policies just to preserve the "integrity" of the federal credit rating? Honest question???
Isn't the root problem that the American electorate wants to have its cake and eat it too? Yanks now want Euro-style government benefits and low taxes all at the same time. In my mind, it's decision time... Slow growth, high taxes, and high unemployment with a large social safety net; or low taxes, low unemployment, higher growth, and less welfare.
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Threethirty
You say interest rates need to rise. This argument is often made, however when the US owes US$16,400,000,000,000 can they afford for interest rates to rise?
Long term US interest rates sit just below 2%, which results in an annual interest bill of about $300bn. To put this into context, this is about a third of the US Defence Budget and dwarfs the recent tax rises which will generate about $60bn. Consider an interest rate rise to, say 5%, and 4 more years of Obama annual deficits of $1,300bn. The US would owe $21,600bn and at 5% that results in an annual interest bill of $1080bn. Again, to put that in context, the annual interest bill would be greater than the Defence Budget and, assuming Total Revenues of $3000bn (currently $2,500bn), for every $3 of revenue, $1 is spent on interest.
Even if interest rates stay at 2%, the picture is not pretty. The market knows the US has the assets to back this debt and, when compared to the rest of the world, the US remains a good debtor. However, the US is on a fiscal trajectory to running out of cash (not assets). The Obama administration know that in 4 years, this is some else's problem.
It's call inter-generational theft!!
Long term US interest rates sit just below 2%, which results in an annual interest bill of about $300bn. To put this into context, this is about a third of the US Defence Budget and dwarfs the recent tax rises which will generate about $60bn. Consider an interest rate rise to, say 5%, and 4 more years of Obama annual deficits of $1,300bn. The US would owe $21,600bn and at 5% that results in an annual interest bill of $1080bn. Again, to put that in context, the annual interest bill would be greater than the Defence Budget and, assuming Total Revenues of $3000bn (currently $2,500bn), for every $3 of revenue, $1 is spent on interest.
Even if interest rates stay at 2%, the picture is not pretty. The market knows the US has the assets to back this debt and, when compared to the rest of the world, the US remains a good debtor. However, the US is on a fiscal trajectory to running out of cash (not assets). The Obama administration know that in 4 years, this is some else's problem.
It's call inter-generational theft!!
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Exactly right Liam! Unfortunately, most Americans cannot do the basic maths you laid out. I think Obama and the Democrats love debt. Not only do they get to spend more and buy votes with it, they know that eventually the bill has to be paid, and then they will finally get to invoke truly punishing taxes on the wealthy so that "social justice" can realized.