Tauranga has one of biggest gulfs between pay and house-price growth

Mayor Greg Brownless says Tauranga is an appealing city to live for many reasons. Photo / File

The Bay of Plenty has been ranked as having the third-largest disparity between wage growth and house price growth.

Analysis by NZME compared the rise in property values - as measured by Quotable Value - in the same areas which Statistics NZ uses to track regional growth.

Taranaki came out tops as the region with the smallest gap, while Auckland had the largest, followed by Waikato and the Bay of Plenty.

Pay in the Taranaki region grew 19.88 per cent to $959 during the four years from June 2013 to June 2017, while the average house price rose 20.3 per cent to $285,967.

The Auckland region - the worst performer on this measure - had wage growth of just 14.51 per cent to $1010 a week, compared with house-price growth of 63.45 per cent to $1.05 million.

Wage growth in the Bay of Plenty was 12.48 per cent, and house price growth was 51.37.

Tauranga mayor Greg Brownless believed wage-based figures would be slightly skewed because of Tauranga's older population. "I suppose because we do have more retired people here the wages aren't going to be as high overall."

He said house prices were based on demand, which meant it was obvious people wanted to live in Tauranga.

Nationwide median wage growth was 14.71 per cent across the four-year period to $959, compared with average house-price growth of 44.83 per cent to $639,051.

All of the regions with a significant disparity had experienced migration from Auckland and increased investor interest.

Tauranga Harcourts managing director Simon Martin said house pricing could not be controlled because it was based on supply and demand, pushing the prices up.

"We don't have a massive supply."

Tauranga's City Transformation chairman Larry Baldock said the city was starting to see better wage growth, but it was not keeping up with the growth in population.

He said Tauranga was one of the fastest-growing cities in New Zealand but did not have the land area to be able to grow. That meant availability would have to come from people leaving the area which was not happening.

Wage growth has become the focus of intense scrutiny in economics in the past few years because it failed to accelerate as employment rates recovered in the wake of the global financial crisis.

Unemployment in New Zealand was sitting at 4.8 per cent - which economists regard as near to full employment, from a practical point of view.

The employment rate - the proportion of working-age people in a job - is sitting above 66 per cent, which is higher than New Zealand's major trading partners.

But despite that wages remain nearly static, rising by just 1.6 per cent in the year to March 2016 and 1.7 per cent in the year to March 2017.

- Additional reporting NZME