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An international survey that found New Zealand the least affordable country for house buyers was widely attacked yesterday and its findings questioned.
Prime Minister Helen Clark disputed conclusions from the fourth annual Demographia survey, which she said was as misleading.
She said the survey's sample of countries was too small and lacked enough European nations to have any real meaning.
The survey found New Zealand the least affordable place compared with Australia, the United States, Ireland, Canada and Britain.
It was based on a comparison between median wages and median prices.
Survey authors Wendell Cox of the United States and property developer Hugh Pavletich of Christchurch made their calculations based on local interest rates and a 100 per cent 30-year mortgage.
A New Zealand household would need 18.6 years of income to buy a house and pay the mortgage. Rates, taxes, maintenance and other costs would be extra.
Helen Clark told TVNZ that the survey cited only six countries, and omitted other countries such as France, Sweden, Austria, Germany and Spain.
But she acknowledged it was tough for young people buying their first homes and said rising property prices had given a lot of homeowners an extraordinary feeling of wealth.
Housing Minister Maryan Street said the survey was too selective and simplistic.
"Demographia are clearly politically driven, and so to say we're worst off in the world when there's just six countries is an exaggeration," she said.
Japan, Sweden, France and Germany also had high house prices.
Her Housing Affordability Bill introduced into Parliament last month was one step being taken to solve the problem.
But she said other measures would soon be announced.
KiwiSaver, able to be used for house deposits by 2010, and the Government's Welcome Home Loan scheme, which had helped about 3000 first home buyers, were other measures already in place, she said.
Plans to redevelop existing state housing areas in Papakura and Weymouth would help, she said.
Auckland developer Mark Hackshaw also took issue with the Demographia report, saying the raw cost of land was about 10 per cent of residential prices so freeing more sections would make little difference.
