Auckland’s median price was $1.2 million in January, The latest real estate institute figures show and it now has a “Median Multiple” Of 11.2 according to the Report. That’s up from 10.0 last year, when it was ranked fourth most unaffordable market, and from 6.4 in 2010.
Regions with house prices more than three times the median regional income are considered unaffordable, while those with prices more than five times the median income are severely unaffordable.
Auckland’s median multiple makes it severely unaffordable, but the city is far from alone in its lack of affordable housing. Auckland is the eighth least affordable market for housing among world cities.
Hong Kong retained its long-time position as the most unaffordable market in the world with a median multiple of 23.2.
Sydney, Vancouver, San Jose in California, and Melbourne rounded out the top five most unaffordable markets with median multiples of 15.3, 13.3, 12.6 and 12.1 respectively.
There has been an unprecedented deterioration in affordability over the pandemic, with the number of severely unaffordable markets up 60 per cent in 2021 compared to 2019, the last pre-pandemic year, according to the report.
The drivers for this are the pandemic-related demand shock combined with supply-chain bottlenecks and permitting delays that have slowed new-home construction, it says.
Only one market qualifies as affordable as it has a median multiple under 3.0. That is Pittsburg at 2.7. It is followed by Oklahoma City and Rochester at 3.3, with Edmonton and St. Louis at 3.6.
Affordability issues are a big concern for New Zealanders, with new Massey University research showing home affordability declined 24 per cent between August and November.
