Press Release – Massey University’s Real Estate Analysis Unit
Homes are becoming more affordable across New Zealand, according to the latest Home Affordability Report from Massey University’s Real Estate Analysis Unit. Wednesday, March 28, 2012
Home Affordability Improves – But For How Long?
Homes are becoming more affordable across New Zealand, according to the latest Home Affordability Report from Massey University’s Real Estate Analysis Unit.
But there are some signs the improvements may be short-lived. Increased turnover rates indicate that demand is causing pressure in some parts of the housing market, particularly in Auckland and Christchurch.
During the first quarter, ending February 2012, national affordability improved by 4.9 per cent, and seven of the 12 regions also showed improvement.
The trend is even more pronounced when viewed on an annual basis, with national affordability improving by 8.8 per cent. Of the 12 regions, only Canterbury has declined in affordability over the past year.
Regional quarterly improvements were led by Southland (9.1 per cent), followed by Auckland (6.0 per cent), Otago (4.9 per cent), Canterbury/Westland (4.7 per cent), Central Otago/Lakes (3.4 per cent), Manawatu/Wanganui (2.9 per cent), and Taranaki (1.7 per cent).
However, housing affordability deteriorated in five regions over the past quarter: Northland (3.0 per cent), Hawke’s Bay (2.9 per cent), Nelson/Marlborough (1.2 per cent), Wellington (0.5 per cent), and Waikato/Bay of Plenty (0.4 per cent).
All three drivers of affordability improved during the first quarter. The national median house price fell to $355,000, there was a $4.06 increase in the average wage, and the average monthly mortgage rate decreased from 6.15 per cent to 6.08 per cent.
“It seems historically low mortgage rates, combined with more relaxed lending criteria by the banks, are bringing more first-time buyers into the market,” says Professor Bob Hargreaves, director of Massey’s Real Estate Analysis Unit. “Of course, interest rates will not remain this low indefinitely.”
At 125.3 per cent of the national index, Auckland has retained its place as the country’s least affordable region, followed closely by Central Otago/Lakes at 125.1 per cent. Southland is still the most affordable place in New Zealand to buy a house with an index of 54.5 per cent, with Manawatu/Wanganui in second place at 71.27 per cent.
The full Home Affordability Report – March 2012 can be downloaded from: