It would take 19 median incomes in Auckland to buy a home for
the city's median house price.
Property in some of the world's biggest cities cost a lot
more than in New Zealand's biggest city, but Auckland wages
make it much harder to get on the property ladder.
In the 1,119,195 Census forms filled out for Auckland, the
median annual income was $29,600, a New Zealand Herald
That's almost 20 times less than the Real Estate Institute's
median house price figure of $582,000.
In London it takes 11 annual average incomes to reach the
average house price of $777,000, and 13 in Vancouver and
Sydney - with average house prices of $687,000 and $791,970.
"You are certainly not going to become a first-home buyer on
the average income," said Associate Professor David Tripe at
Massey University's Centre for Banking Studies.
Professor Tripe said Auckland incomes were low because the
percentage of unskilled workers was high compared with other
"We've got quite a lot of people who are not working ... and
they drag the average incomes down.
"We're relatively low paid because in most cases, we're
relatively unproductive ... one of the big challenges is to
get the skill level of the workforce up, get productivity up
and then we can be quite a lot richer."
The Government has introduced several measure in a bid to
slow house-price increases, including the Reserve Bank's
loan-to-value rules which restrict to 10 per cent the total
of a bank's lending to borrowers with less than a 20 per cent
Auckland needs 39,000 new homes within three years and the
Housing Accord between the Auckland Council and the
Government will fast-track building consents.
Areas that will get developments include Orakei, Pukekohe,
Papakura, East Tamaki, West Harbour and Kumeu.
Professor Tripe said the new developments were being
criticised for not being in the first-home buyer price
But banks would favour customers who had saved over a long
period and he encouraged house hunters not to become
disheartened and keep adding to their savings accounts.
Buyers could also look at non-bank lending but should shop
around and be sure they can handle the repayments.
Professor Tripe said he expects that in about six months, the
Reserve Bank will see the mortgage restrictions haven't had a
great effect on prices, as property commentators "don't think
it's going to solve the problems of rapid house price rises
Valuer Bruce Wiggins of Quotable Value said the LVR changes
had not yet had any distinct effect on prices in Auckland,
and open home numbers were decreasing with more sales being
made by negotiation rather than auction.
"Investors are also in the market, however they are only
progressing on properties where they will see good returns."
QV figures yesterday showed the average house price in
Auckland had reached $685,350 - an increase of 15.2 per cent
on a year ago and 25.4 per on the 2007 peak.
- Alanah Eriksen of the New Zealand Herald