Auckland house prices overtake Australia's big cities'
5:00AM Sunday June 24, 2007
By Julie Jacobson
Median house prices in Auckland are now outstripping those in all of Australia's major cities, except Sydney and Perth.
Auckland's median of NZ$450,000 ranks ahead of Canberra on A$395,000 (NZ$436,000), Melbourne on A$380,000, and Brisbane on A$345,000.
And a new international housing affordability survey describes Auckland, Wellington and Christchurch as "severely unaffordable". Of 157 international locations, Auckland ranks 21st least affordable city in which to buy a home, with its median price almost seven times the median household income.
Melbourne ranks a few places behind on 23rd, with its median price 6.6 times the median income. Sydney, meanwhile, sits in 7th place with an affordability rating of 8.5. Its median house price is A$516,000. Christchurch is 31st on the list (with an affordability rating of 6) and Wellington is 47th (rating of 5.4). Los Angeles tops the list - with an affordability rating of 11.4.
Nationally, Australia and New Zealand have a housing affordability ratio of 6.6, compared with 5.5 in Britain and 3.7 in the United States. The internationally accepted standard for affordability is that the median house price does not exceed three times the median household income.
But though the figures might show Auckland is still more affordable than Sydney, it's not the whole picture.
Hugh Pavleitch, co-author of the Demographia survey, said Sydney's multi-million-dollar harbourside realty skewed median prices in that city and nationally.
Many houses in Auckland were now fetching considerably more than similar properties in the larger Australian cities. The NZ$535,000 median for Auckland's North Shore is comparable to the whole of Sydney median of A$516,000.
Author and media commentator Gordon McLauchlan said he had noted the diminishing gap between property prices in Australia and New Zealand on a recent visit to Sydney. "You can buy a studio apartment around the Cross and Potts Point [inner city] for about the same as you pay in Auckland."
Extra costs such as stamp duty (payable when buying a house) were offset by higher wages across the ditch - generally around 30 per cent more, he said.
Friends who had bought an inner-city apartment in Melbourne had paid considerably less than they would have for a similar property in Auckland.
In May, a survey by financial analysts JDJL showed it took nearly all the average weekly Auckland take-home pay (99.5 per cent) to make a mortgage repayment on a median house. For all of New Zealand the figure was 74 per cent, while Australians forked out just 34.5 per cent of their weekly earnings.
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