Home-buying has moved within slightly closer reach of Cantabrians in the past year, despite the housing shortage and rises in house prices.

Wage increases and falling mortgage interest rates have more than offset higher prices to make ownership 2.3 per cent more affordable than a year ago in Canterbury-Westland, Massey University researchers say.

The university's quarterly home affordability study found buying had become cheaper everywhere in the country except Auckland.

Massey property professor Bob Hargreaves said low interest rates were making the most difference.

"I cannot remember interest rates being this low and it makes a huge difference to debt servicing," he said. "There will be first-home buyers and investors who have been sitting on the fence and now think it's a good time to jump into the market."

Interest rates are at their lowest level since the 1960s after tumbling sharply when the financial crisis hit in late 2008.

Both fixed and floating rates have continued to fall a small amount this year as banks compete for customers.

The Massey survey found Southland was the most affordable region for home buyers, followed by Manawatu-Whanganui and Otago.

The Central Otago Lakes region was the least affordable, followed by Auckland and Nelson-Marlborough.

The university calculates affordability by weighing median house prices against average incomes and mortgage borrowing rates.

New figures from valuation agency Quotable Value (QV) show house values have risen 6.6 per cent in Christchurch in the past year and by about 12 per cent in the Selwyn and Waimakariri districts.

QV noted that while values are up for Christchurch homes on the more stable technical category 1 and 2 land, average values for TC3 properties are now 3 per cent less than before the quakes.

QV valuer Daryl Taggart said there was more sales activity on the west side of the city than the east side.

Average increases in values over the past year were 5.4 per cent for the eastern suburbs, 8.2 per cent for the south and west, 6.4 per cent for the central city and northern suburbs, and 9.6 per cent for the hill suburbs.

- © Fairfax NZ News

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