Auckland is the fourth most expensive city in the world

The latest survey, using data from 2015, shows houses in Auckland cost 9.7 times the median income, compared to 8.2 times the median income a year earlier.That puts the city at the fourth most unaffordable along with level with Melbourne and San Jose, California, behind only Hong Kong, Sydney and Vancouver. Auckland is up from ninth place a year ago.

Prime Minister John Key said Auckland house prices were due to a combination of supply and demand, confidence about Auckland, low inflation and low interest rates. Read the full article here.

“In part, it does reflect the fact that Auckland is a very attractive place to live,” he told Morning Report.

Listen to John Key on Morning Report ( 5 min 9 sec )

This did not mean properties were out of the reach of a person on a median income, he said. A wide range of houses were available and people could have a first home that was less than the median price and work their way up.MelbourneHousing2013

“We have the lowest interest rates we’ve had in the last 50 or 60 years, we’ve had mortgage interest rates with a 4 in front of them you’ve got banks still able to lend well in excess of 80 percent of a new home in Auckland.Mr Key said the survey’s figures could be dated because house price increases slowed at the end of last year.”The very back end of 2015 they started coming off, I think, certainly not rising as rapidly.”

However property prices had been going up too fast, he said.”In broad terms I think everyone acknowledges that Auckland house prices have been rising too rapidly.It was “unquestionable” that there had been a big increase in demand over the past few years.”But if you look at what’s been happening in Auckland, we have the highest level of construction in the last 11 years, we now have 106 special housing areas in Auckland, the number of consents is rising rapidly.”There’s no question you need more supply, there’s no question we’re pushing things through as fast as we can.”

 

Although real estate prices in Auckland are high they are also very high compared to median wage in Melbourne.