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1  Introduction

The affordability of housing is an important subject for New Zealanders, and it has received considerable recent public attention. This paper examines the nature of housing affordability in New Zealand.

This paper has two main purposes. The first is to review a range of definitions and approaches to the measurement of housing affordability. The second is to examine the evidence on housing affordability in New Zealand over the last two decades.

The concept of affordability and its measurement is the subject of Section 2, which also includes a discussion of specific definitions of housing affordability. Section 3 examines the various ways of measuring housing affordability, and outlines the strengths and weaknesses of each. Having grounded our analysis in this discussion of methods, the paper then reviews evidence of affordability in New Zealand. We present and discuss time series affordability data, using various measures, in Section 4. We examine trends, and discuss the drivers of these movements. We consider the near term future of these series, and whether current trends show any cause for concern. Section 5 presents some international comparisons. Section 6 summarises and discusses the findings of this paper.

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