Isaac Davison is a NZ Herald political reporter.

House cost rise 'badge of shame'

Labour points to finding NZ prices rose fastest of developed nations.
A new report shows just how quickly house prices rose in 2015. Photo / Doug Sherring
A new report shows just how quickly house prices rose in 2015. Photo / Doug Sherring

The affordability of New Zealand's housing returned to the spotlight in Parliament yesterday.

The debate was reignited by a US study, cited by Labour, which showed house prices rose here more than any other developed country last year.

Figures compiled by the Federal Reserve in Dallas showed that New Zealand's residential property prices grew by more than 10 per cent in the first three quarters of 2015.

That was more than 23 other developed countries, among which the average rise in price was 3.8 per cent.

Labour's housing spokesman Phil Twyford said the findings were New Zealand's "badge of shame".

During question time in Parliament yesterday, he also cited the latest AMP 360 Housing Affordability Index, which shows that housing has become less affordable for Auckland's first-home buyers under National.

The average first-home-buying couple in the city are spending 47.9 per cent of their income on their mortgage - up from 38.9 per cent in 2008.

"It now takes nearly half the income of a typical first-home buyer to buy a lower-end home in Auckland," Mr Twyford said.

Housing Minister Nick Smith defended the Government's record on housing, saying that overall, properties were still more affordable on a mortgage-to-income basis than in 2008.

The AMP 360 index shows that the average individual is spending 86.9 per cent of their income on their mortgage in Auckland - down from a peak of 101.7 per cent in late 2007, when Labour was in power.

That trend is similar nationwide, where the income-to-mortgage ratio has fallen from 73 per cent in September 2008 to 54 per cent in February.

Dr Smith said efforts to increase housing supply and record-low interest rates were helping New Zealanders get into homes.

Average interests rates were twice as high under Labour, he said.

- NZ Herald

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