Taranaki bucks the NZ trend

CAMPBELL THWAITES
Last updated 05:00 03/07/2014

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Taranaki homes have become easier to afford but tougher mortgage deposit requirements mean buying a home is still out of reach for many.

A Massey University report found houses across Taranaki had become more affordable over the last year.

However, lending rules introduced in October mean most home buyers have to come up with a 20 per cent deposit to qualify for a mortgage.

Teena Conroy and her husband will be looking for a house in the future but not right now, she said, because bringing together the 20 per cent deposit was a challenge.

In Taranaki, the average house price would require a deposit of $54,000.

She said her and her partner were both employed fulltime but it was still difficult saving for the deposit while paying rent and bills.

"The goalpost just gets further away," she said.

Professor Bob Hargreaves, from Massey University, said the increased house affordability in Taranaki had bucked the national trend. This was due in part to house prices dropping, he said.

In Taranaki prices decreased by an average of $10,500 over the last year, according to Real Estate Institute of New Zealand statistics, he said.

Sales manager at Taranaki Harcourts, Graham Richards, said while South and Central Taranaki house prices had dropped, this was not the case in New Plymouth.

He said this was because of the limited number of houses available for purchase in New Plymouth and the relatively high demand. "House stocks are 50 per cent of what they were five years ago," he said.

Comparatively, South Taranaki had a larger availability of houses and less demand, meaning buyers had more choice.

Hargreaves said another factor influencing the increase in the housing affordability index across Taranaki was the increase in average wages.

Between April 2013 and April 2014, the average weekly wage in Taranaki increased by $73.31, compared with a $34.53 increase nationally, he said.

This was due to Taranaki's buoyant economy, given the strong dairy and oil industries, Hargreaves said.

Nationally, house affordability worsened, according to the report, because of a $38,000 increase in average house prices and the average mortgage interest rate also increasing.

Hargreaves said one of the most striking trends was the growing gap in affordability between larger urban centres and provincial towns.

Taranaki was one of only five regions to show an increase in affordability, along with the Southland, Manawatu/Wanganui, Otago and Nelson regions.

Not surprisingly, Auckland was the least affordable region, with Central Otago/Lakes and Canterbury next, the report said.

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Campbell Thwaites is an AUT journalism student

- Taranaki Daily News

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