Southland leads in house affordability
Southland had the biggest improvement in house affordability, a new report shows.
The region's house affordability improved 14 per cent, the latest Massey University home affordability report shows. This was despite the university's all-districts national affordability index falling 7.6 per cent in the May year, as rising interest rates and house prices outpaced pay rises.
"There was no real surprise in this result, because the average annual wage increase ... [is] 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.
Seven regions had a fall in affordability, with the biggest decline in Central Otago/Lakes District, down 12.2 per cent.Auckland was the most unaffordable region, as houses rose 9.4 per cent in price.
Hargreaves expects housing affordability to decline further this year as the cost of servicing a mortgage increased.
The widening gap between larger urban centres and the provinces was "mainly a function of differential house prices between regions", he said.
Building consents are expected to keep rising in coming months, despite higher interest rates and signs that the upward trend in home building may be tapering off. Statistics New Zealand data out yesterday shows that - excluding flats - building consents rose 4.6 per cent in May, after falling 5.2 per cent in April.
- The Southland Times