Hous­ing af­ford­abil­ity ris­ing as banks cut in­ter­est rates

South Waikato News - - NEWS -

Own­ing your own home in Waikato has be­come more af­ford­able, thanks to ris­ing wages and lower bor­row­ing rates off­set­ting higher home prices.

Waikato, Bay of Plenty, and Otago had the big­gest year-onyear im­prove­ments in af­ford­abil­ity, both at 12.8 per cent, fol­lowed by Manawatu/Wan­ganui at 11.1 per cent.

The lat­est Massey Univer­sity Home Af­ford­abil­ity Re­port shows the na­tional af­ford­abil­ity in­dex im­proved by 2.8 per cent in the three months end­ing Au­gust to its low­est level in 10 years.

That was due to a $ 6.25 in­crease in the av­er­age wage and fur­ther de­clines in monthly mort­gage costs out­strip­ping a $1000 rise in me­dian home prices over the pe­riod. The Manawatu/Wan­ganui re­gion had the big­gest jump in quar­terly af­ford­abil­ity, with a 9.4 per cent im­prove­ment, fol­lowed by Hawke’s Bay and Waikato at 8.4 per cent and 4.9 per cent re­spec­tively.

Welling­ton had a 1.4 per cent de­te­ri­o­ra­tion in af­ford­abil­ity, and Can­ter­bury/West­land chalked up a 0.3 per cent de­cline.

On an an­nual ba­sis al­most all re­gions saw af­ford­abil­ity im­prove by 4.9 per cent ver­sus 2.9 per cent 12 months ago.

Auck­land was the sin­gle ex­cep­tion, with af­ford­abil­ity de­creas­ing 0.4 per cent com­pared with Au­gust last year.

‘‘House prices in Auck­land are in­creas­ing faster than other re­gions due to the im­bal­ance of new sup­ply to meet de­mand from the in­creas­ingly pop­u­la­tion,’’ said Bob Har­g­reaves, di­rec­tor of Massey’s Real Es­tate Anal­y­sis Unit.

Float­ing mort­gage rates from most ma­jor banks are about 5.75 per cent and two-year fixed rates start at about 5.25 per cent.

Can­ter­bury/West­land and Welling­ton had an­nual im­prove­ments of 2.3 per cent and 1.8 per cent re­spec­tively.

Only the Cen­tral Otago/Lakes dis­trict beat Auck­land in the least af­ford­able hous­ing stakes, with an in­dex rank­ing of 134.6 per cent ver­sus the na­tional av­er­age, al­though af­ford­abil­ity had been im­prov­ing of late.

Auck­land scored 129 per cent ver­sus the na­tional av­er­age.

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