Housing crisis: Investors blamed for worsening housing affordability in small-town NZ

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Housing investors unable to afford to buy in markets like Auckland are instead throwing their money into small towns – and making life miserable for locals, according to a new report.

House prices have skyrocketed in recent years, but especially so in small towns, shutting locals out of the market and forcing up rents, a new Salvation Army report has found.

“House price increases in urban areas are pushing investors into smaller communities, and that has a social and economic impact on these small communities,” Ana Ika, Salvation Army analyst and author of the group’s fourth State of Our Communities report, told The AM Show on Wednesday.

“House prices have been rising, and that creates a lot of financial hardship for many of the locals… there are minimal employment opportunities so there’s not a lot of space for locals to increase their incomes to match the housing costs.”

While house prices in Auckland have gone up about 40 percent in the past five years – almost all of it in the past two – in Carterton it’s risen 141 percent, from $280,980 in 2016 to $677,162. Carterton – near Wellington – was one of three small towns looked at in the report, along with Tokoroa in the south Waikato and Invercargill in Southland.