Tauranga, Auckland among world's most pricey places

A Tauranga youngster enjoying summer at the Strand. Photo / Sarah Gully

Tauranga is in the top 20 of the world's overly-expensive places to live, and Auckland is not far behind, in an international survey of housing affordability, released today.

The survey ranked Vancouver, Canada, as the most unaffordable place to live, followed by a swag of Australian places – Sydney, Darwin, and the Gold and Sunshine Coasts.

The survey was conducted by Australian firm Demographia, and involved respondents in six western countries: USA, Canada, the United Kingdom, Ireland, Australia and New Zealand.

It did not include Hong Kong, however, where housing is notoriously expensive.

Here's where the New Zealand cities placed in the top 60 on the "severely unaffordable" scale:

20th Tauranga
22nd Auckland
31st Christchurch
41st Wellington
47th Dunedin

Palmerston North, Napier/Hastings and Hamilton were also described as "seriously unaffordable", while not making the 60 listed on the table.

Tauranga is one of the retirement capitals of New Zealand. It's one of the country's fastest growing cities, with a 14 per cent increase in population between the 2001 census and the 2006 census. The current population is estimated to be around 118,000 (2009).

The most expensive place in the United States to live was Honolulu, Hawaii (6th overall) and in Great Britain it was Bournemouth (7th).

Australia was by far the least affordable of the countries surveyed, followed by New Zealand, Britain, Canada, Ireland and the United States. A household in Sydney may have to spend as much as 50 per cent of its income on housing.

By contrast, American cities dominated the first few hundred places on the affordable housing index.

There, housing could cost around 20 per cent of household income.

Detroit, Michigan and South Bend, Indiana are where the cheapest housing options are available to home buyers.

Another Michigan town, Flint, came in 6th spot. Flint is (in)famous as the setting for Michael Moore's 1989 documentary Roger and Me, about how the closure of the GM automotive plant there had decimated the city to the tune of 30,000 jobs.

The Demographia study examines the relationship between household incomes and house prices, in determining a city's affordability.

"Since 1991 – the year of the Resource Management Act- housing affordability has declined substantially in New Zealand", the report's authors write.

The report said the housing market here had experienced a "bubble", which had burst in 2008 due to the global financial crisis, leading to the unavailabilty of credit.

The report also identified problems and solutions:

"Recently, the government's 2025 Taskforce identified planning constraints on land as the "biggest obstacle" to providing housing that is affordable."

The report said the New Zealand government needs to focus on policies which will free up as much land and housing as possible, at prices prospective homeowners can afford.

One of the report's authors is New Zealander Hugh Pavletich, of Christchurch. Pavletich is a former head of BOMA – the Building Owners and Manufacturers Association.

He currently operates a website called Performance Urban Planning.