MEDIA RELEASE
Monday 24 March 2008
HUGH PAVLETICH
“Housing Affordability: Good Progress in New Zealand”
“The initial steps announced by the New Zealand Government, in belatedly addressing the serious issue of housing
affordability, are to be welcomed” said Hugh Pavletich, co author of the Annual Demographia International Housing
Affordability Survey.
The 2008 4th Edition Demographia Survey (Media Release) released 21 January found that New Zealand, with Australia, was the least affordable of the six Anglo countries
surveyed. Canadians can expect to pay 3.1 times their annual household incomes to house themselves; Americans 3.6 times;
the Irish 4.7 times; the British 5.6 times and Australians and New Zealanders 6.3 times annual household earnings.
When mortgage interest costs are added – New Zealanders are in the worst position.
A report just released by the Governments House Price Steering Group, led by the New Zealand Prime Minister Rt Hon Helen
Clark (refer A lifetime of renting? - Stuff.co.nz and Radical plans for cheaper housing - Stuff.co.nz ) estimates that there is a need to build a further 20,000 residential units annually, to meet the shortfall in demand.
There are currently around 24,000 residential units being built in New Zealand annually.
Further announcements were also made by the Minister of Housing Hon Maryan Street and Minister of Building and
Construction Minister Hon Shane Jones, to lower costs, simplify and speed up building consent processes.
The earlier initiative by the Government announced early December 2007, with its “inclusionary zoning” (requiring
developers / builders to supply an unspecified percentage of affordable housing) Affordable Housing Enabling Territorial
Authorities Bill (AHETA Bill) now looks likely to be withdrawn.
The AHETA Bill has been opposed by Hugh Pavletich Scoop: NZ Govt's Housing Affordability Package Pathetic and Scoop: Housing Affordability: Open Letter to Minister and March Update), the business community (here) and the local government community
New Zealand is currently experiencing a massive surge of people moving permanently to Australia, as illustrated by
Statistics New Zealand latest Report (Statistics NZ Commentary and Tables). In February this year 3,500 people moved to Australia in comparison with 2,500 people in February 2007.
Internationally - inwards and outwards migration currently match and New Zealand risks slipping in to negative
migration.
Housing affordability is a “priority issue” with the Australian Federal Government.
The recently released AMP NATSEM Income and Wealth Report ( Media Release and Full Report) clearly illustrates how Australians are currently experiencing housing stress and excessive and expanding mortgage
debt loads. NATSEM is a research centre associated with the University of Canberra.
This important Report was extensively reported in the Australian media last week (NARSEM - Google News Search).
This follows an announcement Media Release: NEW ZONE TO BOOST HOUSING IN GROWTH AREAS March 4, 2008, by the Premier of Victoria, Hon John Brumby Australia, that a further 90,000 lots are to be released on
the fringes of Melbourne. Mr Brumby made the announcement at the Urban Development Institute of Australia (UDIA) 2008 National Congress held in Melbourne 3 – 6 March.
Outside of Melbourne, new starter homes are currently being put in place between $A260,000 to $A280,000 and it is
expected that these initiatives by the Brumby Government will assist enormously in allowing new starter house and land
packages to be put in place at below $A200,000.
New Zealanders and Australians from other States are well aware of the massive and growing affordability advantages of
the State of Victoria, Australia.
“The New Zealand Housing Minister needs to wake up and realise that the Hobsonville, Auckland $NZ350,000 pricing levels
are a million miles away from being affordable” said Hugh Pavletich, adding “ ‘Affordable’ in the New Zealand context is
new starter homes on the fringes at between $NZ140,000 - $NZ160,000”. (refer Television One interview with Hugh Pavletich and "Our young New Zealanders deserve affordable housing")
A discussion paper prepared by Hugh Pavletich “Getting performance urban planning in place” released March 19, 2008, sets out a suggested “roadmap” to assist markets suffering housing stress to solve the
problem over a reasonable and realistic time frame.
This 28 page discussion paper outlines how this problem evolved, illustrates real life differences between affordable
and unaffordable markets, explains how single income families could purchase housing at below three times their annual
household income sixty years ago (can we learn from history?) and suggests the need for housing stressed Nations or
States to enact a Local Government Performance Act and set up Local Government Performance Authorities.
For further information – communicate –
Hugh Pavletich
Co author – Annual Demographia International Housing Affordability Survey
Christchurch
New Zealand
Tel +64 3 343 9944
Further background information –
ENDS