Friday, March 09, 2018

It really is an Auckland housing crisis

How bad is Auckland's housing crisis? This bad:

It takes Aucklanders on an average weekly income a punitive 16 years of hard slog to save for a house, new research from the Real Estate Institute has revealed.

"The average Auckland household looking to purchase a house that costs $670,000 - the price that 25 per cent of the houses in Auckland fell below - may have to save for 832 weeks, exactly 16 years, in order to have a $134,000 deposit for that property," REINZ said this morning.

The figures are based on an average weekly income, weekly tax payments and average weekly expenses required by couples in our largest city. REINZ then calculated any weekly surplus left over.

And of course the amount you need for a deposit will increase over that time, so you'll need to save for even longer. Meanwhile, in Wellington or Christchurch, you only need to save for three or four years for the same lower-quartile house. No wonder young people are fleeing Auckland to buy elsewhere.

But it also reinforces just how much the housing crisis is a primarily Auckland problem, which is going to need an Auckland solution. The problem is that any effective solution (e.g. building masses more houses) means lowering prices, which those who have already bought into (or expect to profit from) the bubble will hate. But if we want to ensure that all kiwis can own a home of their own, that's what we've got to do.