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Affordability of Housing: Concepts, Measurement and Evidence

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Abstract

There has recently been widespread public debate and media attention around housing affordability. This paper discusses the concept of affordability as it applies to housing, examines the approaches used to measure affordability, and then documents the aggregate evidence for New Zealand over the last twenty years. We largely use the Household Economic Survey conducted by Statistics New Zealand to obtain our data. We conclude that affordability is difficult to define and that there is no consensus as to the best way to measure it. Using a range of measures, we examine the trends over time. Our data reveals no long-term trend in affordability when considering all measures. Different measures show different movements over time. Affordability has appeared to move in cycles over the last twenty years.

Suggested Citation

  • Mark Robinson & Grant M. Scobie & Brian Hallinan, 2006. "Affordability of Housing: Concepts, Measurement and Evidence," Treasury Working Paper Series 06/03, New Zealand Treasury.
    • Handle: RePEc:nzt:nztwps:06/03
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    File URL: https://treasury.govt.nz/sites/default/files/2007-09/twp06-03.pdf
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    1. K.E. Hancock, 1993. "Can Pay? Won't Pay?' or Economic Principles of 'Affordability," Urban Studies, Urban Studies Journal Limited, vol. 30(1), pages 127-145, February.
    2. Edward Ludwig Glaeser & Joseph Gyourko, 2003. "The impact of building restrictions on housing affordability," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 21-39.
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    1. Ben-Shahar, Danny & Gabriel, Stuart & Golan, Roni, 2019. "Housing affordability and inequality:A consumption-adjusted approach," Journal of Housing Economics, Elsevier, vol. 45(C), pages 1-1.
    2. Antje Hildebrandt & Reiner Martin & Katharina Steiner & Karin Wagner, 2012. "Residential Property Markets in CESEE EU Member States," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 8-30.
    3. Sock-Yong Phang, 2009. "Affordable homeownership policy : implications for housing markets," Microeconomics Working Papers 23052, East Asian Bureau of Economic Research.
    4. Mulliner, Emma & Smallbone, Kieran & Maliene, Vida, 2013. "An assessment of sustainable housing affordability using a multiple criteria decision making method," Omega, Elsevier, vol. 41(2), pages 270-279.
    5. Sebastian Edwards, 2006. "External Imbalances in an Advanced, Commodity-Exporting Country: The Case of New Zealand," NBER Working Papers 12620, National Bureau of Economic Research, Inc.
    6. Emma Mulliner & Vida Maliene, 2014. "An Analysis of Professional Perceptions of Criteria Contributing to Sustainable Housing Affordability," Sustainability, MDPI, vol. 7(1), pages 1-23, December.
    7. Saberi, Meead & Wu, Hongzhi & Amoh-Gyimah, Richard & Smith, Jonathan & Arunachalam, Dharmalingam, 2017. "Measuring housing and transportation affordability: A case study of Melbourne, Australia," Journal of Transport Geography, Elsevier, vol. 65(C), pages 134-146.
    8. Tiznado-Aitken, Ignacio & Lucas, Karen & Muñoz, Juan Carlos & Hurtubia, Ricardo, 2022. "Freedom of choice? Social and spatial disparities on combined housing and transport affordability," Transport Policy, Elsevier, vol. 122(C), pages 39-53.
    9. Andrew J. Greenlee & Beverly K. Wilson, 2016. "Where Does Location Affordability Drive Residential Mobility? An Analysis of Origin and Destination Communities," Housing Policy Debate, Taylor & Francis Journals, vol. 26(4-5), pages 583-606, September.
    10. Haijin Wu & Guofang Zhai & Wei Chen, 2020. "Combined Rental and Transportation Affordability under China’s Public Rental Housing System—A Case Study of Nanjing," Sustainability, MDPI, vol. 12(21), pages 1-18, October.

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    More about this item

    Keywords

    housing; affordability; New Zealand;
    All these keywords.

    JEL classification:

    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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