Hawke's Bay houses 'seriously unaffordable'

Napier and Hastings homes are described as "seriously unaffordable" in a newly-released major survey.
New Zealand houses are among the world's most expensive when incomes are considered - and Auckland and Tauranga homes are less affordable than those in New York, says the survey.
Low incomes and high prices are preventing many Kiwis from climbing on to the housing ladder.
The seventh annual Demographia International Housing Affordability Survey of 325 cities and regions has given us the thumbs down, putting New Zealand 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 - Auckland, Tauranga, 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 figures were used to measure affordability, taking median house prices and dividing those by gross annual median household income. This gave the house price-income median multiple measure.
The ideal income-to-loan ratio is around 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. Survey co-author Hugh Pavletich, of Christchurch, called for more land to be made available for housing.
"The Government needs to recognise the importance of dealing with the housing supply issues with urgency, so that New Zealand is more affordable and competitive than Australia. This will encourage young New Zealanders to stay in their own country and contribute to its development.
"There is much work to do so that New Zealanders do not have to pay any more than three times their annual household income to house themselves. New Zealanders are paying twice what they should be for housing and construction costs are currently twice per square metre what they should be, due to urban planning degrading the performance of the residential construction sector over recent decades," he said.
Tauranga is our least affordable city, followed by Auckland, Christchurch, Wellington, Dunedin, Hamilton, Napier-Hastings and Palmerston North.
The survey has been criticised by some as pushing right-wing free-market theories and developers' interests.
Brendan O'Donovan, Westpac's chief economist, praised it as useful and said three possible solutions to high house prices included relaxing urban land limits, cutting building compliance costs and imposing a tax on under-used land to discourage developers from hoarding property.
"The Australian and New Zealand housing markets are so stretched, whichever way you cut it compared to most of the rest of the world. A lot of us are saying if you are trying to get more affordable housing, it's not done by first-home buyer grants but more flexible supply-side measures."
This month, Westpac senior economist Dominick Stephens warned home buyers that present below-average fixed term mortgage rates could start rising rapidly. Atlanta is the most affordable major city and Hong Kong is the least affordable. Sydney has become less affordable than Vancouver. The Knight Frank Global House Price Index out late last year showed New Zealand had one of the world's smallest price falls.