Latest news with #Demographia
Scoop
24-07-2025
- Business
- Scoop
'We Don't Get Richer Buying Each Other's Houses': How Auckland's Affordability Story Has Improved
Recent housing affordability rankings have been notable for one thing - Auckland hasn't been in the bottom 10. For many years, it was common for the city to feature among the most unaffordable in the world. But in the most recent Demographia research, it came in at 16th. Hong Kong, Sydney and San Jose, California, were the most expensive. Brisbane, Perth and Melbourne all ranked more unaffordable, on a house price-to-income basis, than Auckland. Auckland had house prices 7.7 times incomes, on average, compared to 14.4 in Hong Kong. So what's driven the improvement, and is it likely to last? Ryan Greenaway-McGrevy, associate professor in economics at the University of Auckland, said part of it was due to the big increase in the supply of housing in the city. "We've been building a hell of a lot of houses in Auckland, mainly since passing the Unitary Plan. That's allowed the supply of housing to catch up with population growth because for a long time we haven't really built enough houses relative to population." He said, since the plan came into force in 2016, there had been a "massive construction boom". "I think over the eight years since then we've issued permits for about 127,000 new dwellings… in 2016, we had just over half a million dwellings in Auckland, so that's a massive figure." Greenaway-McGrevy said most of the consents would turn into houses that were built. "We don't really know how many houses are torn down but that just gives you an indication of the amount of construction activity that's been happening." The fact that rents had dropped in real terms in Auckland too showed the impact of the increased supply, said. "There's been a big divergence between rents in Auckland and the rest of the country." He said it also helped that many of the properties built were townhouses and apartments. "They require less land and they're smaller so that's going to be reflected in median prices. So you've got this compositional shift that the median price is picking up." Demand was also weak due to the economic downturn and the increase in interest rates, he said. "A lot more supply and factors limiting demand should all add up to pressure on house prices." The economy should improve and demand would pick up again, but government settings would help affordability, he said. "We've got a set of policy settings where the housing market on the supply side should be more responsive to demand. We've shifted from a situation where housing supply was really unresponsive to demand, to one that's markedly improved so hopefully we'll see fewer constraints on housing supply as Auckland continues to grow in the future." Infometrics chief forecaster Gareth Kiernan agreed the unitary plan had improved supply of housing and made intensification a lot easier. "There are more smaller, and therefore cheaper, housing options available than ten years ago." He said consenting at the current levels combined with close to zero net migration over the next couple of years would further reduce the undersupply of housing. "Let's be clear though: Auckland might not still be in the top 10, but it's nowhere near affordable…house-price-to-income ratios are still worse than at any time prior to 2016." Kelvin Davidson, chief economist at Corelogic, noted that the Demographia comparison did not include the impact of interest rates. Higher interest rates can mean lower house prices but the cost of ownership can still be higher. But he said it was clear the picture had changed for Auckland, "The word shortage is just not talked about anymore. There seems to be a bit of an equilibrium going on at the moment." Government changes around planning reform should help to stop unaffordability reaching the highest levels it hit before, he said. "Housing isn't necessarily affordable in its own right. It's still pretty expensive, but there will be people that still access the market, and I think we can see it with the first-time buyer numbers at the moment. They're really, really strong. "There is, I don't know, an equilibrium at the moment … if you have saved for a bit, and you can satisfy the bank, you're going to be able to find a decent property at a price you can afford and you know money is available. There's a balance between supply and demand, so it sort of feels like there is some kind of balance, which is good. We've needed a period like this for a long time. "I think Chris Bishop's comments a couple of days ago, about decoupling this idea that, you know, to have a strong economy, we have to have a strong housing … I think is a great thing. We don't get richer as a country by buying and selling each other's houses." Demographia considers a ratio house prices three times income affordable but Davidson and Greenaway-McGrevy said that was unlikely to be achievable for Auckland. "As much as I would love to tell you that that would be attainable and feasible, that seems a heroical aspirational goal," Greenaway-McGrevy said. "But if we thought about a multiple of five or six, if we could attain that, that would be great." Davidson agreed it was far outdated. "In some parts of the world for whatever legacy reason it may sort of make sense but I think you have to just acknowledge the world we're in now, it might have been the benchmark at some point but your benchmark has got to change sometimes to reflect reality. A multiple of three is just incredibly unlikely ever again."
RNZ News
23-07-2025
- Business
- RNZ News
'We don't get richer buying each other's houses': How Auckland's affordability story has improved
Auckland has house prices 7.7 times incomes. Photo: 123rf Recent housing affordability rankings have been notable for one thing - Auckland hasn't been in the top 10. For many years, it was common for the city to feature among the most unaffordable in the world. But in the most recent Demographia research, it came in at 16th . Hong Kong, Sydney and San Jose, California, were the most expensive. Brisbane, Perth and Melbourne all ranked more unaffordable, on a house price-to-income basis, than Auckland. Auckland had house prices 7.7 times incomes, on average, compared to 14.4 in Hong Kong. So what's driven the improvement, and is it likely to last? Ryan Greenaway-McGrevy, associate professor in economics at the University of Auckland, said part of it was due to the big increase in the supply of housing in the city. "We've been building a hell of a lot of houses in Auckland, mainly since passing the Unitary Plan. That's allowed the supply of housing to catch up with population growth because for a long time we haven't really built enough houses relative to population." He said, since the plan came into force in 2016, there had been a "massive construction boom". "I think over the eight years since then we've issued permits for about 127,000 new dwellings… in 2016, we had just over half a million dwellings in Auckland, so that's a massive figure." Greenaway-McGrevy said most of the consents would turn into houses that were built. "We don't really know how many houses are torn down but that just gives you an indication of the amount of construction activity that's been happening." The fact that rents had dropped in real terms in Auckland too showed the impact of the increased supply, said. "There's been a big divergence between rents in Auckland and the rest of the country." He said it also helped that many of the properties built were townhouses and apartments. "They require less land and they're smaller so that's going to be reflected in median prices. So you've got this compositional shift that the median price is picking up." Demand was also weak due to the economic downturn and the increase in interest rates, he said. "A lot more supply and factors limiting demand should all add up to pressure on house prices." The economy should improve and demand would pick up again, but government settings would help affordability, he said. "We've got a set of policy settings where the housing market on the supply side should be more responsive to demand. We've shifted from a situation where housing supply was really unresponsive to demand, to one that's markedly improved so hopefully we'll see fewer constraints on housing supply as Auckland continues to grow in the future." Infometrics chief forecaster Gareth Kiernan agreed the unitary plan had improved supply of housing and made intensification a lot easier. "There are more smaller, and therefore cheaper, housing options available than ten years ago." He said consenting at the current levels combined with close to zero net migration over the next couple of years would further reduce the undersupply of housing. "Let's be clear though: Auckland might not still be in the top 10, but it's nowhere near affordable…house-price-to-income ratios are still worse than at any time prior to 2016." Kelvin Davidson, chief economist at Corelogic, noted that the Demographia comparison did not include the impact of interest rates. Higher interest rates can mean lower house prices but the cost of ownership can still be higher. But he said it was clear the picture had changed for Auckland, "The word shortage is just not talked about anymore. There seems to be a bit of an equilibrium going on at the moment." Government changes around planning reform should help to stop unaffordability reaching the highest levels it hit before, he said. "Housing isn't necessarily affordable in its own right. It's still pretty expensive, but there will be people that still access the market, and I think we can see it with the first-time buyer numbers at the moment. They're really, really strong. "There is, I don't know, an equilibrium at the moment … if you have saved for a bit, and you can satisfy the bank, you're going to be able to find a decent property at a price you can afford and you know money is available. There's a balance between supply and demand, so it sort of feels like there is some kind of balance, which is good. We've needed a period like this for a long time. "I think Chris Bishop's comments a couple of days ago, about decoupling this idea that, you know, to have a strong economy, we have to have a strong housing … I think is a great thing. We don't get richer as a country by buying and selling each other's houses." Demographia considers a ratio house prices three times income affordable but Davidson and Greenaway-McGrevy said that was unlikely to be achievable for Auckland. "As much as I would love to tell you that that would be attainable and feasible, that seems a heroical aspirational goal," Greenaway-McGrevy said. "But if we thought about a multiple of five or six, if we could attain that, that would be great." Davidson agreed it was far outdated. "In some parts of the world for whatever legacy reason it may sort of make sense but I think you have to just acknowledge the world we're in now, it might have been the benchmark at some point but your benchmark has got to change sometimes to reflect reality. A multiple of three is just incredibly unlikely ever again."
Time Out
15-07-2025
- Business
- Time Out
Hong Kong has once again ranked as the most unaffordable city in the world for home ownership
The 2025 edition of the Demographia International Housing Affordability report has been released, rating 95 major metropolitan areas across eight nations for housing affordability in the third quarter of 2024, and the results don't bode well for us. Hong Kong has once again been ranked as the most unaffordable city in the world for buying a home. For over 20 years, this report has assessed housing affordability by comparing median house prices to median household incomes, naming this median price-to-income ratio the 'median multiple'. This presents a more accurate view than just looking at housing prices, and also better represents middle- and lower-income households. Based on the median multiple, housing markets are then ranked from 'affordable' to 'impossibly unaffordable' – and to no Hongkonger's surprise, we're high up there in the latter category. Median multiples of nine and above fall into the 'impossibly unaffordable' grouping, and Hong Kong has a score of 14.4. In fact, Hong Kong has been the least affordable market in the Demographia report for the past 14 years. However, the statistics show that this is already an improvement from our median multiple of 16.7 in 2023 and 20.8 pre-pandemic in 2019. Limited land supply and land use are among the biggest culprits of housing unaffordability worldwide, but Demographia does add that there are two projects that could contribute greatly to Hong Kong's housing stock. The Northern Metropolis project could add more than 900,000 new housing units near the Shenzhen border, while Lantau Vision Tomorrow could provide more than 200,000 units on reclaimed islands. Troublingly, the housing market is worsening globally. The 'impossibly unaffordable' category was added last year to better reflect modern circumstances, when 'affordable' was the predominant standard only three decades ago. This year, there are 12 impossibly unaffordable markets and, for the first time ever, no markets ranked affordable at all. On the far end of the scale, Pittsburgh in the United States was the most affordable market for the fifth year in a row, with a median multiple of 3.2, which classifies it under 'moderately unaffordable'. See the list of top 10 most unaffordable markets below, and visit Demographia for the full list and report. Top 10 most unaffordable housing markets in the world Hong Kong (Median multiple 14.4) Sydney, Australia (13.8) San Jose, USA (12.1) Vancouver, Canada (11.8) Los Angeles, USA (11.2) Adelaide, Australia (10.9) Honolulu, USA (10.8) San Francisco, USA (10) Melbourne, Australia (9.7) San Diego, USA (9.5)
South China Morning Post
25-06-2025
- Business
- South China Morning Post
Hong Kong tops global list for priciest homes despite property slump: Deutsche Bank
Hong Kong remains the world's most expensive city to buy a home, despite a 20 per cent decline in prices over the past five years, according to the Deutsche Bank Research Institute's Mapping the World's Prices report. Despite economic headwinds and high mortgage costs, the average price for a flat in the city centre stood at US$25,946 per square metre – keeping Hong Kong ahead of rivals like Zurich, Singapore and New York, according to the report released on Tuesday, which covered 69 cities globally. The sky-high property prices also dragged down Hong Kong's quality of life ranking to 48th globally, as residents struggled with affordability, the report said. In terms of housing affordability – measured by mortgage as a percentage of income – Hong Kong, at 150 per cent, ranks in the top quarter among the world's least affordable cities, as high mortgage payments eat into after-tax income. Beijing (220 per cent) and Shanghai (207 per cent) rank sixth and seventh, respectively, globally because of elevated home prices and relatively uncompetitive salaries. 13:00 How Hong Kong's housing market became among the world's most unaffordable How Hong Kong's housing market became among the world's most unaffordable The report reflects the Demographia International Housing Affordability survey from 2024, when Hong Kong retained its dubious distinction as the world's most unaffordable property market for the 14th straight year. The average family would have to bank its entire income for 16.7 years, down from 18.8 years in the previous year, to cover the average selling price of a home in the city.
Canberra Times
04-06-2025
- Business
- Canberra Times
Can you nab a home alone in Australia's priciest city? It's not easy, but we've found some buys
Buying your first home in Sydney has always been hard. Now, it's near-impossible - especially if you're doing it on your own. The Sydney lifestyle is attractive but it's difficult to get a foot in the property door if you are single. Pic: Shutterstock With apartments regularly listed for over $1 million and houses well beyond that, the average first-home buyer is increasingly shut out of the market. With a changing work landscape where many employers are requiring staff back in the office, living far from the CBD is no longer the easy fix. Sydney is one of the world's most expensive property markets. A Demographia study last year ranked it the second-least affordable city globally, second only to Hong Kong. According to recent Cotality data, nearly two-thirds of Sydney's housing stock is priced above $1 million (a record-high 64.4 per cent). "This is unsurprising given the median value of all houses and units in greater Sydney was $1.195 million in April," said Head of Research at Cotality, Eliza Owen. "Even for those with a budget of $1 million, the kind of property available in Sydney is generally smaller, and further afield than a decade ago." Dual incomes the unspoken standard Australia's housing market is leaving solo buyers behind. Wage growth hasn't kept up with surging house prices, meaning a single income rarely stretches far enough. "Your experience as a first-home buyer is really determined by where in the country you're trying to buy," said Sarah Megginson, personal finance expert at Finder. "If you want to buy your first home in Sydney on your own, you need a very high income or help with the deposit - or potentially both. There's no getting around this. "Even a small apartment is going to set you back around $600-700,000. It's completely unaffordable for first-time buyers, even with benefits like stamp duty exemptions and LMI waivers." The crippling state of the market is also changing the demographics historically able to buy property. "The rate of home ownership has gradually declined over time, particularly among younger, low-income households where income cannot keep pace with growth," said Ms Owen. "The average age of first-home buyers has increased, and increasingly wealthy households are stuck renting for longer, which increases competition for low-income, renting households." "These suburbs are definitely areas that appeal to first-time buyers," says Ray White agent Hayden Sacilotto of the St George suburbs of Mortdale, Penshurst, Allawah and Panania. Pic: Supplied Hayden Sacilotto, Principal at Ray White Georges River, sees this struggle play out regularly. "It is almost impossible for first-home buyers on a single income to purchase in most areas of Sydney, especially with reasonable proximity to the city," he said. "My office will sell 150 properties a year and it is rare to see a first-home buyer - single or couple - purchase a home in the St George region without the help of Mum and Dad. "The final stages of negotiations tend to revolve around borrowing money from parents to push them across the line." The borrowing power battle Recent Finder research using ABS data shows that the average first-home buyer loan is about $542,000. That's a huge leap to Sydney's median property value of almost $1.2 million, severely restricting a first timer's buying options. "As a first-home buyer, the major pain points you face are saving up the massive deposit, and affording the sky-high repayments each month," said Ms Megginson. Firsthome buyers are borrowing big in Australia. Source: Finder "We've had two rate cuts this year with more predicted, and that's helpful, but the average first home buyer loan size in Australia is around $542,000, which is a weekly repayment of around $800 - with council rates, insurance and potentially strata fees, you're looking at $1,000 per week at a minimum, before you've even turned on the lights." Canstar research is even bleaker. Recent data shows that if you're on a single income of $100,000 a year you could afford to borrow $338,000. With a 20 per cent deposit, that would mean you could buy a property worth about $422,000. Read: not in Sydney. Essentially, solo buyers adamant on purchasing in Sydney are often left with three options: earn a very high income, get family support, or take on a housemate to help cover costs. The borrowing capacity of single-income households lags behind joint-income borrowers. Source: Canstar Where can single-income first-timers buy under $700K? If you earn the average Aussie salary of $103,000 and don't have family help, but want a two-bed apartment with CBD accessibility, what options do you have? It's a question doing the rounds on Reddit's r/AusPropertyChat, where a hopeful home owner asked for suburb suggestions for a principal place of residence. They requested transport links within 40 minutes of the CBD and amenities like shops and gyms on a $600-$700,000 budget. The community came through, naming areas that barely just fit the brief. Inner southwest: Campsie, Canterbury and surrounds With the City and Southwest Metro line set to open in 2026, these suburbs will have trains every four minutes into the CBD. "I'd check out Campsie, Canterbury and surrounds. Border of inner-west. Train stations and a quick ride into the CBD. Good luck!," said one Redditor. "Lovely neighbourhood!," said another of Campsie, noting that it will only be 18 minutes to Central on the metro. Mr Sacilotto agrees these inner southwestern areas are on the rise. "I definitely think these areas will gentrify as new transport lines are built and become operational," he said. "But watch out for complexes with large strata plans - they can have high insurance premiums and risk of ongoing special levies." St George region: Mortdale, Penshurst, Allawah, Panania Users praised these suburbs for their neighbourhood vibe, local amenities, and sub-40-minute train access to the city. Mr Sacilotto says the appeal is real. "These suburbs are definitely areas that appeal to first-time buyers. Transport, education, proximity to the city and the general feel of these suburbs make them highly desirable," he said. "I live in Mortdale myself and as a young couple, my wife and I love the fact that we have the shops on our doorstep." But affordability is already slipping. "These areas are changing as things gentrify and new complexes have been developed over the last five years, which has further caused house prices to surge," said Mr Sacilotto. "New builds that once sold in the $700,000s are now $920,000 to over $1 million," he said. "As the prices of these new units have risen, older '60s and '70s units followed suit." Mid-western Sydney: Meadowbank, West Ryde, Parramatta Redditors also mentioned these northwest and western areas, though Mr Sacilotto urges caution with particular development. "There is an opportunity there, but I would be extremely wary of more modern builds. Often developers initially keep strata rates low to entice buyers, only for owners to be hit with larger strata fees in the near-distant future." One Redditor highlights the side of Meadowbank with older apartment buildings, around Bank Street and Meadow Crescent. "It's a good spot with a 25 to 30-minute train into the city and it's close to the river with walking and cycling paths, and big parks." Advice for solo buyers The so-called 'singles tax' feels like everything costs more - especially a home. But Mr Sacilotto believes this pressure is felt by all first-home buyers. "There is no easy way around it and I don't believe any initiative from the government will change this dramatically. Whether buying solo or with family help, the market's tough," he said. "A good piece of advice would be to find yourself a real estate agent in the areas you prefer who will be willing to help you and also use a broker to secure your finances - don't go to a bank directly." Ms Megginson recommends thinking creatively. "If owning a home is a goal for you and you prefer to stay in Sydney, it might be worth zooming out a little to consider a range of options," she said.
