Wednesday, January 30, 2013

International Housing affordability - NZ rates a mention

I found the following from NCPA fascinating, especially that the US has the best housing affordability, so have cut and paste it for your interest:

The 9th Annual Demographia Housing Affordability Survey for New Geography rates housing markets based on the median multiple, which is median house price divided by pre-tax median household income. Affordable housing markets have a median multiple of 3.0, while severely unaffordable housing markets have a median multiple of 5.1 or over, says Wendell Cox, an adjunct scholar with the National Center for Policy Analysis and principal of Demographia, a public policy firm located in St. Louis.

  • Hong Kong, Vancouver, Sydney, San Jose, San Francisco and London were the least affordable housing markets of the 337 metropolitan markets analyzed in the study. Each had a median multiple close to 8.0 or above.
  • Detroit, Atlanta, Cincinnati, Rochester and St. Louis were the most affordable housing markets in the study. Each had a median multiple close to 2.0.
Of all the nations in the world, the United States has the most affordable or moderately unaffordable markets. The United States had an overall median multiple of 3.2, compared with 5.1 for the United Kingdom, 3.6 for Ireland, 13.5 for Hong Kong and 4.7 for Canada.

  • Overall trends in the nine years the study has been conducted by the Performance Urban Planning organization indicate that housing affordability has risen most in the United States and Ireland.
  • Australia and New Zealand have the most unaffordable major markets that have not shown any sign of improvement. Every major market has been severely unaffordable in every single year.
Empirical evidence suggests that urban containment policies, particularly urban growth boundaries, raise the price of housing relative to income. Cox notes that urban planning results in reduced standards of living, increasing poverty rates and lower discretionary income.
Cox says that urban policy needs to be reset. To make housing more affordable, cities and nations need to shift away from designing urban areas and instead let free market principles allocate land efficiently. With major demographic shifts underway in most nations, access to affordable housing will play a large role in the duration and quality of life of each nation's people.

Source: Wendell Cox, "Demographic and Economic Challenges: The 9th Annual Demographia International Housing Affordability Survey," New Geography, January 21, 2013.


Anonymous said...

Changing policies to increase "affordable housing" by definition reduces house prices - that is a direct government confiscation of the private property rights of those who already own houses.

Why a supposedly right-wing government is trying to destroy the asset based of hard-working Kiwi families makes absolutely no sense.

Houses in NZ are absurdly cheap by international standards - the problem is that so many Kiwis are bludgers that they can't afford a mortgage for even something relatively modest like a $1M house in Auckland or Hamilton.

Hamish said...

Anonymous did you read this piece or just the title?

So you don't have to read it, the people studying this actually use evidence to show your last paragraph is entirely wrong.

Your second paragraph doesn't reference anything, when it clearly needs to as it is just a rant in its current form.

Also, changing policies like relaxing the RMA will increase affordable housing. There is no confiscation of property rights there.
On top of that I'm not aware of any parties policy on housing that would invade your private property rights in any way.

Kleefer said...

I hope the first commenter is being sarcastic (hard to tell on the internet) because if not then that is one of the stupidest comments I have ever read on the issue of housing affordability.

Your claim that reducing house prices is a "confiscation" of the property rights of existing homeowners is absolutely ludicrous. No-one has a "right" to their property being a certain price.

The real confiscation of property rights, which you ignore, takes place when urban planners (tyrants with clipboards) draw lines around cities and ban those outside the lines from building on their own property. This causes the land price escalation that enriches those already in the market at the expense of renters.

The reason a "right-wing" government is doing this is because National understands that high house prices are hurting the economy and increasing poverty. For some time Act has been the most vocal proponent of increasing affordability, while the chardonnay socialists in Labour and the Greens prefer to ignore the pain the policies they advocate are inflicting on many of their constituents.

Anonymous said...

Of course I'm not being sarcastic.

Your claim that reducing house prices is a "confiscation" of the property rights of existing homeowners is absolutely ludicrous

Bullshit. Housing prices are set by an highly regulated market. Increasing affordability necessarily means reducing the assets of those in the market - just like Hellen's confiscation of shareholder values when she hacked Telecom in half. The housing market - as in most of the world, and like most markets in NZ - is highly regulated in a myriad of ways: zoning is only one.
And sure landowners with property just outside some zoning boundary would like the windfall gain that would come from changing zoning regulations.

high house prices are hurting the economy

That's just simply rubbish.

increasing poverty

who gives a shit? I'm not a fucking bleeding-heart socialist. That's always been the problem with ACT, as demonstrated by Roger Douglas's second valedictory speech: the only dispute between ACT and Labour (or even the Greens or Mana) is about the means, not the ends.

As far as I'm concerned - or indeed any half-way competent Austrian economist - NZ's main problem is the 3.5 million people who have a standard of living that is far, far, higher than they can possibly justify or deserve, living off the backs of less than half a million actively productive Kiwi families.

Confiscating asset values generally from the productive fraction of society to give to the undeserving - completely the opposite of what society should be doing.

Anonymous said...

Duh: "what GOVERNMENT should be doing"

there is of course no such thing as society.

enriches those already in the market at the expense of renters

which is a good thing!

Tracey said...

What a w**k*r you are.