Price falls lift home affordability
House price falls in some regions have improved home affordability in New Zealand, a report has found.
The latest Massey University Home Affordability Report reveals improvement in seven out of 13 regions between June and August.
The report also shows national affordability improved 2.1 per cent, and an improvement of 0.6 per cent for Auckland.
The most affordable regions in the country are Southland and Manawatu/Whanganui.
Report author, Associate Professor Graham Squires, said falling house prices in Northland, Wellington and Central Otago were the main drivers for the improved affordability.
“Median house prices in Central Otago Lakes dropped the most over the last quarter, declining by $35,000,” Squires said.
“This was followed by Northland,
Median house prices in Central Otago Lakes dropped the most over the last quarter, declining by $35,000. Associate Professor Graham Squires, report author
where median prices dropped by $30,000, and Wellington experienced a $28,000 drop.”
But compared over a 12-month period, national affordability still decreased 10.5 per cent compared with last year.
Central Otago Lakes houses remained the country’s least affordable at 68 per cent less affordable than the rest of New Zealand, followed by Auckland on 50 per cent.
Median house prices were 14 times the annual wage for Central Otago Lakes region and 13 times the annual wage for Auckland.
“House price-to-wages ratios remain very high, and this continues to place considerable strain on firsthome buyers in Auckland and Central Otago Lakes,” Squires said.
The greatest improvement in affordability was recorded in Northland at 11.5 per cent and Taranaki at 7.5 per cent.
Squires said house prices continued to be the key determining factor in home affordability as borrowing costs had remained relatively low and static.
“We’ve seen significant falls in house prices in some regions this quarter, so it will be interesting to see if this spreads to other regions in the coming quarter,” he said.