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Tauranga’s income to house prices ratio has been labelled ”obscene” after the city was ranked the eighth most expensive place to buy a home in the world.

Meanwhile local business leaders say affordability is a big issue and the problem had also trickled into the rental market.

A local budget advisor says the average family would need at least $900 per week to get by on the bare minimum.

The calculations were made following the 15th annual Demographia International Housing Affordability Study which said the world’s most expensive city was Hong Kong, followed by Vancouver, Sydney, Melbourne, Santa Cruz, San Jose, Los Angeles – and then Tauranga.

The study put Tauranga in front of cities like London and San Francisco, and Toronto, and it had again out-stripped Auckland as New Zealand’s least affordable.

Tauranga residents had a median household income of $68,800 per year while the median house price was $623,000, meaning it would take people more than nine years to pay off a house if they poured every cent into their repayments.


Tauranga Budget Advisory Service manager Diane Bruin said $900 a week would be just enough to cover rent, power, internet, basic food and minimal clothing for two adults and two children living in Tauranga.

Bruin said the ideal situation was recommended for families to have saved about three months of their salary for emergency expenses, which the average family could not afford.

Tauranga families had to budget for a weekly rent of $550 to $600-plus, as well as paying for other essentials including food and power, which often did not leave enough to pay off any debt, Bruin said.

Survey co-author Hugh Pavletich said the local council wasn’t taking its housing problems as seriously as the situation warranted.

Pavletich said it’s only getting worse and the ratio of income to prices in such a small city is obscene.

“The question that needs to be asked is why has it taken the Tauranga City Council so long to deal with housing infrastructure and land supply,” he said.

“This has been staring the city council in the face for years. There is nothing new here.”

It is the second year running Tauranga was ranked less affordable than Auckland, but Mayor Greg Brownless suspected the statistics behind the study did not tell the real story.

“To my mind, no way is it the eighth most unaffordable city in the world,” he said.

“Tauranga is not known for having a lot of high-paying jobs, but you’ve got to remember some people have retired here having made their money.”

This wouldn’t be reflected in median income statistics, he said.

Brownless said he would have no problems if the city’s housing prices fell a little because it was “unfair on people just getting a start”.