The Tauranga-Western Bay region continues to be one of the most unaffordable places to live in New Zealand, second only to Auckland, according to a new report.
In the latest Demographia International Housing Affordability Survey, Tauranga had a "severely unaffordable" median multiple score of 8.1 - a score which measures the ratio of median incomes to median house prices.
A year ago Tauranga's score was 6.8. Anything more than a score of 3 is classified as unaffordable.
The annual survey compares prices to incomes in 367 cities and showed Auckland was one of the worst in the world due to extremely high prices but low wages.
Auckland's housing affordability climbed from the world's ninth most expensive city to the fifth most expensive in only one year.
"There does seem to have been some improvement in wages and salaries in the past 12 months but unfortunately you can't do a lot to alter the market for homes.
Survey co-author Hugh Pavletich of Performance Urban Planning Christchurch, said overall housing in New Zealand was "severely unaffordable" with a median multiple score of 5.2.
Tauranga's Mayor Stuart Crosby said the Demographia index was a "crude measurement" but did highlight the issue of incomes versus house prices in Tauranga.
"I do accept the gap between incomes and house prices has increased and there is no doubt it is particularly challenging for first-home buyers to enter the housing market."
Mr Crosby said there was still land available in the region but building the infrastructure fast enough to keep up with demand was a big issue.
"There does seem to have been some improvement in wages and salaries in the past 12 months but unfortunately you can't do a lot to alter the market for homes."
Mark Lister from Craigs Investment Partners, was not surprised by the survey results. "Tauranga is one of the fastest growing cities in the country and one of the most popular places to live but wages, on average, are well behind places like Auckland and Wellington."
Mr Lister said there was no quick fix.
"It may be cold comfort to those struggling to get onto the housing market but Tauranga is certainly better off than some places. Particularly Auckland which has no more land available for miles."
Tauranga still had land available in suburbs such as The Lakes and Papamoa and there were options available for first-home buyers, he said.
Mr Lister said Tauranga seemed to have become the "victim" of its own success.
"With more people coming into the region, particularly those who have been priced out of the Auckland market, there are now a lot more people fighting over the same properties which is helping to drive up prices."
