Editorial: Growth good if we all benefit

In today's Editorial Dylan Thorne says it is important that wage growth keeps pace with living costs in the region. Photo: John Borren

The Bay economy is booming.

Economic growth was up 4.4 per cent in 2014, and the job sector lifted 3 per cent over the same period.

Millions of dollars have been pumped into expanding the Port of Tauranga and research and development by central Government, while investment in the kiwifruit industry is expected to create hundreds of new jobs.

The population is growing, as is business confidence.

It's a rosy picture and one worth celebrating but economic growth on this scale can place pressure on other areas.

The Western Bay's growing pains are emerging in the form of housing and living costs.

A Demographia International Housing Affordability Survey identified Tauranga-Western Bay as the most unaffordable place to live in New Zealand after Auckland because house values were outstripping incomes.

The rental market is showing similar growing pains.

Last week the Bay of Plenty Times reported a severe rental shortage in Tauranga has created a lottery-type situation with one property receiving 100 enquiries.

Experts warn the situation is likely to get worse.

Figures from Trade Me show the numbers of rentals listed for the city dropped 30 per cent in 2014 while the median price had increased from $320 per week in February 2010 to $370 last month - an increase of 21 per cent.

No doubt the Reserve Bank's high loan-to-value ratio lending restrictions have increased the demand for rentals as people put off buying their first home but there appears to be a wider problem developing.

While it is good to see the region's economy in such good shape, it is important that the benefits of this are felt by all and that wage growth keeps pace with living costs.