Tauranga's global ranking as the 12th least affordable city to buy a home has ''taken the varnish off the positive side of growth''.

Chamber of Commerce chief executive Stan Gregec was responding to the latest housing affordability survey by Demographia International in which Tauranga now out-ranked Auckland as New Zealand's most unaffordable city and was 12th in the world from a sample of 293 cities.

He said significant market forces were dictating the pace of growth in Tauranga.

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The survey, which compared median household income to median house prices and calculated how many years it would take to pay off a median-priced house, showed big challenges were ahead for Tauranga, he said.

Gregec said it highlighted how Tauranga's basic unaffordability was a strong downside to all the positive indicators of growth.

''The basic fact is that Tauranga is becoming and has become more and more unaffordable for people at the lower end of the market.''

Gregec said you could debate that the survey was skewed because it only focused on median-priced houses which had been influenced by LVR restrictions. But the underlying fact was that Tauranga had always been high priced and prices had jumped in the past two to three years.

''Boy has it been on a roll.''

Nigel Tutt, the chief executive of economic development agency Priority One said the unaffordability did not seem to stop people moving to live in Tauranga. The equation still stacked up compared with the larger mortgages needed to buy in Auckland.

''Higher prices are good for some and not for others.''

He said Tauranga was a highly desirable place to live, offering a brilliant lifestyle. And rather than the city being regarded as a career staging post, businesses had become much stronger and were attracting people in their own right.


Tutt said Tauranga now had many more career options than 10 years ago.

He said median income levels were influenced by Tauranga's large number of retired people and median house prices by some very high-value houses including coastal houses.

House prices had gone up, but he was surprised at the extent suggested by the Demographia data. In 2013 it took 5.9 years of a full household income to pay off a median-priced house. That had now increased to 9.7 years.

Meanwhile, Accessible Properties, the social housing provider that took over Tauranga's stock of state houses, said it was working hard to help make sure as many homes as possible were made available.

Tauranga general manager Vicki McLaren said the survey showed it was taking longer for people to own their own home. ''We have a bottleneck.''

Since taking over the state houses, Accessible Properties had added three more homes with many more in the planning phase. ''We will deliver an additional 150 homes in the years ahead.''

McLaren said they were part of a Tauranga group working together on a number of initiatives to try and ease the pressure on housing.

Tauranga median total annual household income needed to buy a median-priced house*
2014: 6.6 years
2015: 6.8 years
2016: 8.1 years
2017: 9.7 years
* Median is the midpoint in a table of figures