Tauranga houses most pricey in NZ

Tauranga houses are the most expensive in New Zealand when incomes are taken into account and are among the most unaffordable in the world.
A major survey released today found homes in Tauranga to be less affordable than those in New York.
The ideal income-to-loan ratio is about three times an annual salary. But in New Zealand it takes 5.3 times the average annual salary to pay for a house.
In Tauranga it takes 6.5 times the average annual salary and in Auckland 6.4 times. In New York, it's 6.1.
Bayleys and Eves Realty spokesman Gil Beadle believed the finding was the result of a lack of supply of lower to mid-priced homes in Tauranga, combined with a large number of retired people.
"On the surface of things you could say 'shock horror, that's terrible' but if you look across the whole of Tauranga, and the average income, we have a lot of retired people," Mr Beadle said.
"The average income is affected by the amount of retired people. That demographic skews the figure slightly."
Mr Beadle said houses built in Tauranga and Mount Maunganui during the growth period of 2006-07 were middle to upper priced homes, due to the high value of land.
"We didn't see a lot of low-cost housing, what people might regard as more affordable housing, being built. We don't have a large supply of middle and lower price homes available."
Tauranga Mayor Stuart Crosby was not surprised by the survey, which he said reinforced earlier research.
"Houses in Tauranga compared to wages and salaries are very high compared to Australasia.
"The bit about New York - that's stretching the imagination a little bit, New York is a very big place. But Australasia, absolutely."
Mr Crosby said the Tauranga City Council had been working to address the issue by working with land developers and builders.
"What's really happened is house prices have continued to go up until the last 12 months with the recession, rather quicker than wages and salaries.
"One of our goals is to improve our economy to improve wages and salaries."
Mr Crosby said high prices were a positive for people already in the housing market and was a reflection of Tauranga's popularity. But he believed bargains still existed.
"You can still buy a lovely home in Tauranga for $300,000."
The seventh annual Demographia International Housing Affordability Survey of 325 cities and regions has given New Zealand the thumbs down, putting us alongside Australia, Britain, the United States, Canada and Ireland as among the world's worst housing markets. Four of the eight New Zealand markets surveyed - Tauranga, Auckland, Christchurch and Wellington - were classed "severely unaffordable". The other four - Hamilton, Napier-Hastings, Palmerston North, and Dunedin - were "seriously unaffordable".
Despite three years of a depressed economy, housing remains out of many Kiwis' reach. The situation has worsened because house prices fell only marginally, yet job security lessened and wage rises dried up.
Reserve Bank and Real Estate Institute data were used to measure affordability by taking median house prices and dividing those by gross annual median household income. This gave the house price-income median multiple measure.
Survey co-author Hugh Pavletich, of Christchurch, called for more land to be made available for housing.
The survey has been criticised by some as pushing right-wing free-market theories and developers' interests.
But Brendan O'Donovan, Westpac's chief economist, praised it as useful and said three possible solutions included relaxing urban land limits, cutting building compliance costs and imposing a tax on under-used land to discourage developers from hoarding property.