How many Big Macs would it take to pay for an average house in Auckland?
And assuming you could find a vendor willing to accept payment in the iconic burgers, how would Auckland's Big Mac buying power compare with other places such as Sydney, Melbourne or New York?
These questions were recently pondered by the technical boffins at local property valuation website Homes.co.nz as they updated the valuations for 1.4 million New Zealand homes that are freely available on their website.
Borrowing a leaf from the pages of the famous Big Mac Index developed by The Economist magazine to measure whether currencies in different countries are over or under-valued depending on their Big Mac purchasing power, Homes.co.nz developed its own Big Mac Property Index.
According to the website, the median value of homes in Auckland was $875,056 at the beginning of this month.
Or for the same amount of money you could get 145,843 Big Macs at $6 a pop.
So how would that compare with Melbourne, Sydney or New York?
According to Homes.co.nz. you would need considerably fewer Big Macs to buy median priced homes in either Melbourne or New York, and slightly less to buy a median priced home in Sydney (after converting local Big Mac and median prices to New Zealand dollars).
In Melbourne it would cost the equivalent of just 104,950 Big Macs to buy a median priced home, a whopping 40,893 fewer burgers (-28%) than in Auckland.
In Sydney it would take 139,339 Big Macs, just 6504 (-4.5%) fewer than in Auckland and in New York you need to cook up 116,448 of the famous burgers to buy a median priced home, which is 29,395 (-20.1%) fewer than you'd need in Auckland.
Although it's a light hearted comparison, it does highlight a serious issue and suggests Auckland housing is seriously more expensive than other cities around the world.
"While this is a quasi-metric, it gives a little context to comparing other cities around the world," Homes.co.nz marketing manager Jeremy O'Hanlon said.
"It's hard to believe that we've created a more expensive city than a global centre like New York.
"I'm not sure if there's any comfort in Auckland being just slightly worse off than Sydney, they have significant problems of their own," he said.
42 Comments
PTI should be used more often, it gives a much better perspective to things.
I remember back in the OE days, the easiest way to compare prices was:
A Kilo of Apples
A big Mac Meal
a Standard beer.
Convert the price to NZ$ and you had an excellent gauge on relative costs.
Switzerland was truly expensive on all fronts. Maybe John Key is right, we are becoming the Swiss South Pacific.
Nice idea. Rather than convert to $NZ house price and NZ Big Mac price, might it be a better comparison to leave prices in local equivalent? Thus, $NZ for median AKL house divided by the price of a Big Mac from Queen Street Maccas. Ditto, NYC median price divided by the local NYC Big Mac price. No currency issues then, as the currency comparator truly is purely the Big Mac.
That's my understanding too murray86, but with merely a degree in economics and never an actual economist, was loath to lay claim to any specialist knowedge I lacked, so thanks for that. Still, great idea, and if the currency variance is in the order of 17% or more as suggested here, it would be interesting to see the results of a currency neutral model, if the good people at Homes choose to re-run the analysis.
I doubt that very much - the NZ state alone would own far more if you include state highways, parks, housing, offices etc. In addition, the Catholic Church is actually hundreds of inter-related parties/entities with different ownership. Your local parish is owned by the local parish and not by Pope Francis.
If we exclude governments/states (which includes the Vatican City) then I don't know.
Average price of a new York city apartment in January 2015 was 1.7 million USD, the average price of a 1 bedder was $710k USD, the average price of an apartment in all boroughs of new York including the Bronx and Queens was about $750k USD, this is all Jan 2015 pricing, would be interested to see what values were used for New york
That's factually incorrect keywest as usual .... NY Metro area is 450k USD not 750k as you would have us believe.
https://smartasset.com/mortgage/what-is-the-cost-of-living-in-new-york-…
Maybe you think it would be better to buy than to rent in New York? Think again. According to the National Association of Realtors, the average home price in the New York metro area is $455,500—but once again, by including the (generally cheaper) suburbs, that severely understates the situation. The table below shows average home value by borough for New York City.
yeah nah, current median listings are for $735k for NY City, NY metro area includes towns close to Toronto by Niagara falls (USA is a big place), maybe you should get a map of USA and take a look...just checked Manhattan again and as of Q1 2016 average apartment was $1.9 million USD
All I am asking for is balanced reporting. My personal agenda is my own business, the agenda of interest.co.nz should be for balanced reporting, it would help if they stopped with click bait headlines and just gave some more detail perhaps in appendices, they do have a responsibility to be accurate and fair, and please all my tenants work very hard and I am completely missing your point? Why on earth are my tenants any of your business? Once again off you guys go again with personal attacks, it's like the Muppet show
Look at the link I sent
Brooklyn 550k
Bronx 370k
http://www.trulia.com/real_estate/Bronx-New_York/
Bronx median USD 355k which is 480k NZD.....
Currently holidaying in U.S.A. And part Canada and I can tell you that we are extremely fortunate to be living in
NZ?
Standard of living and convenience in NZ leaves the States for dead.
The Americans think their country is the greatest but Yeah/Nah.
After the American elections I reckon there will be plenty looking to get out and will head for Australasia.
The golden rule for property investment has always been...location,location, location.
People who bought in the peripheral areas might get their figures burnt.
If I had to buy property in NZ now I would be buying central Auckland with good access to the CBD. Congestion will continue to increase and people will pay more for centrally located property.
In a downturn centrally located property holds up better.
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