Auckland homes most unaffordable
Housing became less affordable over the past year, as rising interest rates and house prices outpaced pay rises a new report shows.
The latest Massey University home affordability report shows the University's all districts national affordability index has deteriorated by 7.6 per cent in the 12 months to May.
"There was no real surprise in this result because the average weekly wage increase of $34.53 was not enough to offset a $38,000 increase in the national median house price and an increase in the average mortgage interest rate from 5.57 per cent to 5.64 per cent," Professor Bob Hargreaves of the university's school of economics and finance said.
Southland had had the biggest improvement in affordability (up 14.4 per cent), followed by Taranaki (8.4 per cent), Manawatu/Wanganui (6.2 per cent), Nelson/Marlborough (2.2 per cent) and Otago (0.8 per cent).
Auckland was the most unaffordable region but seven regions had a fall in affordability, with the biggest decline in Central Otago/Lakes District (down 12.2 per cent).
Canterbury/Westland houses were 10.6 per cent more expensive and Auckland's were 9.1 per cent. In Wellington and the Waikato, affordability declined by 3.4 per cent and 4.8 per cent respectively.
Hargreaves expected housing affordability to decline further this year as the cost of servicing a mortgage increased.
He also said the widening gap between larger urban centres and the provinces which was "mainly a function of differential house prices between regions".