Home ownership out of reach for many
Lower average house prices and downward pressure on interest rates meant home loans hit the most affordable levels in September that New Zealand has seen in eight years.
The Roost Home Loan Affordability report said last month offered the best levels of loan affordability since 2004 with 20.6 per cent of the average income of a couple on the median wage needed to meet payments on a floating 80 per cent mortgage for a median-priced house.
This was down from 20.7 per cent in August this year. For singles on the median wage, it would take 50.7 per cent of a salary to meet mortgage payments, down from 82.2 per cent in September 2007.
But home ownership is still priced high for most people earning the median take home pay a week – almost $800, the report said. ‘‘ Essentially the median income for the typical buyer is not high enough to buy a medianpriced house, even with a 20 per cent deposit,’’ it said.
The median house price eased by $5000 to $350,000 last month and economists are picking the Official Cash Rate will be kept at 2.5 per cent into 2012, so floating mortgage rates are expected to stay low.
Floating interest rates were 5.73 per cent on average at most banks in September, unchanged since August but down 51 basis points from a year ago. More than half of mortgage holders nationwide are on floating options.
Rhonda Maxwell, spokeswoman for mortgage broker Roost Home Loans said banks were eager to lend. ‘‘First home buyers are seeing low interest rates and a stable outlook into early next year, which is improving confidence.