Auckland and Central Otago Lakes are battling it out for the questionable title of New Zealand's least affordable region. Photo/ Brett Phibbs
Auckland and Central Otago Lakes are battling it out for the questionable title of New Zealand's least affordable region. Photo/ Brett Phibbs
Auckland and Central Otago Lakes are battling it out for the questionable title of New Zealand's least affordable region when it comes to house prices.
Massey University released its quarterly Home Affordability Report index today, which showed Auckland and Central Otago Lakes were respectively 62 and 61 per cent less affordable than the rest of the country - an "unprecedented level".
The most affordable region was Manawatu/Whanganui, at 54 per cent more affordable than the rest of New Zealand.
The report showed affordability in Central Otago Lakes declined by nearly 21 per cent over the past year.
This was the largest drop for any region in New Zealand.
The Waikato/Bay of Plenty region was the only other region to become less affordable in the past 12 months, with a drop of 4.7 per cent.
Massey University senior property lecturer and report author Susan Flint-Hartle said this could be attributed to spill-over from the Auckland housing market, with many out looking for homes in nearby regions.
The decline in affordability in Central Otago Lakes was exacerbated by its tourism industry, which put stress on the supply of affordable housing.
In Auckland, demand continued to drive median house prices up, making entry into the market a challenge, Flint-Hartle said.
The report, which covered the period from June 2016 to August 2016, found that Auckland had hit a new high median for this quarter of $842,500 in August, representing a 13.85 per cent increase, or over $100,000, in the past 12 months.
The median house price in Auckland is now 13.5 times median annual household income, Flint-Hartle said.
The decline in affordability in Central Otago Lakes was exacerbated its tourism industry, said Massey University senior property lecturer and report author Susan Flint-Hartle. Photo/ supplied
While increases in house prices in many regions were significantly outstripping wage growth, Flint-Hartle said reductions in the Official Cash Rate were, to some extent, easing the burden for home owners.
"This, of course, is not much comfort for first home buyers keen to buy in our two most expensive regions.
"They are facing more stringent deposit requirements, markets characterised by intense competition and a lack of supply.
"Cheaper borrowing also holds the potential to push house prices higher if demand for housing continues to grow. This could lead again to a deterioration in housing affordability as we move into the summer period."
Massey University's index follows the Real Estate Institute figures for September, which showed national median house sale prices set records last month.
Nationally, the median residential sale price rose from $484,650 a year ago to $515,000 and it has not been that high before.
New highs were also set in Northland ($390,000), Waikato/Bay of Plenty ($458,500), Taranaki ($350,000), Wellington ($480,000), Nelson/Marlborough ($450,000) and Otago ($296,000).
