Looking beyond the median multiple. Measuring housing affordability

Author:

Auckland Council Chief Economist,David Norman,Harshal Chitale

Publication date:

2017

Topics:

Economy, business and industry, Housing

Source:

Auckland Council Chief Economist's Office

Summary:

Insights on the Auckland economy

Auckland faces a significant housing challenge. Auckland Council has an important, but not unilateral, role in overcoming this problem.

Yet an overly-simplistic approach to comparing affordability here and elsewhere is not helpful. For instance, recent news coverage has focused on the fact that Auckland has a median house price to median income ratio of around 10 (the “median multiple”), which one study categorises as “severely unaffordable”. Auckland Council acknowledges that a ratio of 10 is too high, and in 2015 endorsed a bold target of achieving a median multiple of 5.0 by 2030. ...