Houses more affordable - survey
Higher wages, easing mortgage rates and a drop in the national median house price have combined to make housing slightly more affordable in the past few months.
Massey University's latest home affordability index improved 1.47 per cent in the three months to August 31, compared with the previous quarter.
The picture was even better on an annual basis, with affordability slowing but still 2.4 per cent better than a year earlier.
Key factors during the quarter included a $2000 reduction in the national median house price and a 72 cent rise in the average wage rate.
There was a small fall in average mortgage interest rates, from 5.57 to 5.52 per cent, the report said.
However, location made a difference, with affordability increasing in only half of the index's 12 regions.
During the quarter, a buyer's purchasing power improved in the Central Otago-Lakes district (6.2 per cent), followed by Wellington (3.7 per cent), Southland (3.4 per cent), Northland (3.2 per cent) Auckland (2.2 per cent) and Canterbury-Westland (0.7 per cent).
The biggest fall in affordability was in Hawke's Bay (7.4 per cent), followed by Manawatu-Wanganui (3.7 per cent), Otago (3.3 per cent), Taranaki (2.4 per cent), Nelson-Marlborough (2.0 per cent) and Waikato (0.4 per cent).
While Auckland's affordability improved on a quarterly basis, Massey noted that it deteriorated on an annual basis, and the city remained the most expensive region.
Housing in Auckland cost 135 per cent of the national average, followed by Central Otago-Lakes (122 per cent) and Nelson-Marlborough (103 per cent).
Southland retained its place as the cheapest region in New Zealand with an index reading of 52.3 per cent of the national average.
Manawatu-Wanganui was second cheapest at 66.7 per cent, and Otago third (67.3 per cent).
The Massey figures do not cover more recent house price increases or the developing trend for banks to charge higher interest rates for buyers with low equity.
- © Fairfax NZ News