Tauranga has the world's fifth most unaffordable housing market according to an international study. Photo / George Novak
Tauranga has the world's fifth most unaffordable housing market according to an international study. Photo / George Novak
Tauranga is the fifth most unaffordable place to buy a home in the world, according to an international study.
The 16th Annual Demographia International Housing Affordability Survey showed Tauranga was also the worst in New Zealand to buy a home, ahead of Auckland.
The survey rates middle income housing affordabilityusing the "median multiple" which is the median house price divided by the median household income.
Real estate experts said Tauranga was a desirable place to live or retire, while city leaders said to accommodate the fast-growing population and property demand it needed to grow up rather than out.
Tauranga jumped to fifth from eighth on the survey of 309 cities around the world in just one year.
According to OneRoof property data, the median value for a house in Tauranga is $670,000 - up 4 per cent in the last year.
Those who beat the city to the bottom of the list, and the world's most expensive place to buy a house when compared to incomes, are Hong Kong followed by Vancouver, Sydney, Melbourne and then Tauranga.
Ninety-two major housing markets were evaluated, including three megacities, with more than 10 million residents.
The seaside city is the world's fifth costliest housing market when prices are compared to incomes. Photo / George Novak
Tauranga mayor Tenby Powell said there were three main reasons Tauranga was in this position.
"There is not only the supply and demand, or the cost of building on our topography but also our wages.
"We can't stop growth so we need to manage it and part of that is inviting businesses that want to have their head offices here.
"That will add value to the city and get us up the value chain in terms of our employment."
Western Bay of Plenty mayor Garry Webber, left, and Tauranga mayor Tenby Powell. Photo / File
Western Bay of Plenty mayor Gary Webber said residents needed to be aware of alternative land use and he believed it was better for Tauranga to intensify the existing residential land and build up.
"If it is good land that is what people are planting kiwifruit on.
"You have to ask the question is it better to be growing kiwifruit which employs people and creates jobs as opposed to covering it in houses."
Priority One chief executive Nigel Tutt. Photo / File
Priority One chief executive Nigel Tutt said a population increase of 10 per cent in the last three years and strong demand for housing had led to increased prices for houses and rentals.
"In response, we need to take an aggressive approach to freeing up more housing supply as a region, which ultimately means growing up rather than out."
Managing director of Realty Group Simon Anderson believed a lot of income could be retirement income. Photo / File
Managing director of Realty Group Simon Anderson believed a lot of income could be retirement income and that would make a lower income base on average.
"The survey just reflects the desirability of the area to either retire or live here and the reflection of that is growth in the property market."
Tremains general manager Anton Jones (front). Photo / File
Tremains general manager Anton Jones said it was evident house prices had gone up as wages didn't tend to go down.
"The property market always goes on a cycle and what goes up must come down. But to what level and by how much, you never know."
OneRoof editor Owen Vaughan said drivers of Tauranga's property market were generally down to population growth. Photo / Ted Baghurst
OneRoof editor Owen Vaughan said drivers of Tauranga's property market were generally down to population growth.
"It is an attractive place for a downsizer from Auckland who has been able to cash in on their property sales and buy something that may be cheaper.
"But I also haven't seen a collapse in buyer activity that would suggest that Tauranga is now completely unaffordable."
Harcourt's managing director Simon Martin. Photo / File
Harcourt's managing director Simon Martin said although the age of the population may have skewed the data people also had to realise Tauranga and the Western Bay was one of the most desirable beach locations in New Zealand.
"That in itself pushes the value up."
Why one woman has given up study to buy a home
After moving to the Bay from Auckland about three years ago, Jade Richard and her partner are ready to start looking for a home to buy - but it has come with sacrifice.
Both in their late 20s it seemed like the right thing to do to complete the "Kiwi dream" Richard said.
"I think that is the next step in our life, just wanting that stability and from there we can make even bigger goals like having children.
"But it is a bit out of reach at the moment."
After a setback regarding her partner's superannuation from Australia, Richard decided to work this year and save, instead of returning to her last year of study.
"Even that, it might not be enough to buy a home at the end of this year, and then I will have to go back to finish my last year of study."
According to the couple's income, they can look at houses around the $470,000 mark but Richard would prefer to look for something about $500,000.
"For a decent house in a decent area, you are looking at half a million and that is for nothing amazing."
The couple also looked at building wondering if that would be cheaper.
They even went so far as looking at properties in Huntly but felt even there properties or land were out of their price range.
"I'm in my late 20s and I feel like we are running out of time [to get on the property ladder]."
List of New Zealand's affordable cities out of 309:
