Home affordability improves in four regions

massey-university

Thu Jun 21 2007 12:00:00 GMT+1200 (New Zealand Standard Time)

Home affordability improves in four regions

Thursday, 21 June 2007, 4:58 pm
Press Release: Massey University

Thursday, June 21, 2007

Signs of a small improvement in home affordability show up in four regions in the latest quarterly report from Massey University.

It became easier to buy a home in Waikato-Bay of Plenty, Central Otago-Lakes, Otago and Southland in the three months to May 31.

However, affordability – a measure that factors in average prices, pay and interest rates – worsened in eight regions and still worsened nationally, in the quarter by 4 per cent and by 11.9 per cent for the year to May.

Only Central Otago-Lakes, New Zealand’s least affordable region, showed an improvement on an annual basis.

The Home Affordability report from the University’s Property Foundation shows the overall decline in affordability was primarily due to increases in the national median house price (4.1 per cent), outstripping increases in the average weekly wage (1.4 per cent), with weighted mortgage interest rates also up (1.25 per cent).

Regionally, affordability was a mixed picture and shows fluctuations within regions. There were improvements over the May quarter in Central Otago-Lakes (6.6 per cent), Southland (4.8 per cent), Otago (2.2 per cent) and Waikato-Bay of Plenty (0.2 per cent).

By comparison, the regions to show an improvement in affordability in the February quarter were Otago (5.6 per cent), Nelson-Marlborough (5.4 per cent), Taranaki (2.0 per cent) and Wellington (0.4 per cent). This makes Otago the only region to show an improvement for two quarters in a row this year.

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In the May quarter there were quarterly declines in affordability in eight regions: Taranaki (17.5 per cent), Northland (5.8 per cent), Auckland (5.2 per cent), Canterbury-Westland (4.9 per cent), Wellington (2.8 per cent), Taranaki (2.6 per cent), Manawatu-Wanganui 2.4 , Nelson-Marlborough (2.2 per cent) and Hawkes Bay (0.6 per cent).

In the 12 months to the end of May, national home affordability declined by 11.9 per cent, with increases in house prices well ahead of average weekly wage increases (5 per cent) and mortgage interest rate increases (2.8 per cent).

Central Otago-Lakes showed a 3.8 per cent improvement in affordability but all other regions recorded declines. The largest decline was in Southland (26.8 per cent), followed by Wellington (18.3 per cent) and Manawatu-Wanganui (16.9 per cent).

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

ENDS

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