Home affordability improves

Photo /Paul Estcourt

Homes became more affordable in the three months to August 31, as interest rates, wages and house prices remained subdued, Massey University's latest Home Affordability Report shows.

The national affordability index improved by 0.8 per cent during the period, equating to a 9.7 per cent increase in the year to date, but down on the 11.1 per cent recorded in the three months to May 31.

Professor Bob Hargreaves of the university's school of economics and finance said the housing market was characterised by low turnover, an expectation that mortgage interest rates will not increase much in the short-term and continuing low wage growth.

The average weekly wage rate increased by $6.15 over the quarter, the median house price remained static at $350,000 and there was a 0.01 per cent decrease in the average monthly mortgage interest rate to 6.59 per cent, he said.

Northland (6.4 per cent) Taranaki (3.9 per cent), Southland (3.3 per cent), Otago (2.5 per cent), Hawkes Bay (2.3 per cent), Auckland (1.7 per cent) and Nelson/Marlborough (1.3 per cent) all showed an improvement in affordability during the quarter.

Those showing a reduction in affordability were: Waikato/Bay of Plenty (3.8 per cent), Canterbury/Westland (2.3 per cent), Wellington (1.6 per cent), Central Otago Lakes (1.3 per cent), Manawatu/Wanganui (0.3 per cent).

Central Otago Lakes remains the least affordable region with an index of 141.2 per cent of the national average followed by the Auckland region at 121.1 per cent and Nelson/Marlborough on 105.4 per cent.

Southland retains its place as the most affordable region with an index of 61.6 per cent of the national average, Otago is in second place at 67.9 per cent followed by Manawatu/ Wanganui in third at 71.9 per cent.

- NZ HERALD ONLINE