Spiralling costs painful in Tauranga

Tauranga’s housing unaffordability is no surprise to the locals, who have had to cope with a rising cost of living as retirees and expats move in.

Demographia’s latest international housing affordability survey shows the city is now New Zealand’s most unaffordable.

In Tauranga, buying a house requires the equivalent of 8.9 times annual household income, pricier even than Auckland, where the ratio is 8.8 times.

Tauranga’s Neighbourhood Residents Association spokesman Phil Green said the causes of the city’s unaffordability included the salary gap between the urban centres and the increase in people moving from Auckland and Wellington.

‘‘Our housing prices have been spiralling upwards for years and our basic supermarket and transport costs have all been rising,’’ Green said.

‘‘We’ve seen a real change in Tauranga from basically a small town, village feeling to a city that is now in its teenage years ... it hasn’t quite got to where it should to yet but we have definitely seen the influx of people from Auckland and Wellington and expats as well.’’

Bayleys Tauranga branch manager Dickie Burman said the large proportion of retirees would have decreased the average household income of the city.

‘‘Across the board in New Zealand, prices have increased,’’ he said.

‘‘Auckland has seen a bit of a reduction, but we’ve just been steady in terms of valuations and going up for a little while.’’

Hugh Pavletich of Demographia said Tauranga’s housing problem was a long time coming.

‘‘Tauranga has been very slow in dealing with finance for infrastructure,’’ he said.

‘‘It’s a great disappointment really ... The threshold for affordability is about three times your household income so when we’re talking about 8.8 for Auckland and 8.9 for Tauranga they’re getting into the severely unaffordable territory.’’