Buying a home is tougher

Owning a home is getting harder as house prices rise and sales reach record levels.

The AMP Home Affordability Index fell 3.3 per cent in the December quarter, after falls in the previous four quarters of between 0.1 per cent and 15 per cent.

In the past 12 months national home affordability declined 24.4 per cent, meaning homes were nearly 25 per cent less affordable than a year ago, AMP Banking deputy managing director Michael Guggenheimer said.

That was despite stable interest rates, and a 2 per cent rise in wage rates.

House sales for the past year were reported as 99,658, with the median dwelling price rising 5.4 per cent to $195,000 over the December quarter.

"The fact that New Zealand has reached almost 100,000 residential sales per year shows the housing market is not only buoyant but sustainable," Guggenheimer said.

"Domestic economic strength and continuing immigration means the high residential market activity is likely to continue through2003."

Among the regions, nine of the 11 surveyed recorded a quarterly decline in home affordability, led by Southland (down 17 per cent), followed by Otago (15.2 per cent), Nelson/Marlborough (12.5 per cent), Wellington (7.9 per cent), Auckland (3.8 per cent), Taranaki (2.6 per cent), Hawkes Bay (1.7 per cent), Canterbury/Westland (1.2 per cent), and Waikato/Bay of Plenty/Gisborne (0.1 per cent).

Home affordability improved in Northland (up 3.9 per cent), and Manawatu/Wanganui (2.2 per cent).

On an annual basis, houses were less affordable in all 11 regions, led by Nelson/Marlborough (down 29 per cent) and Auckland (28.9 per cent).

- NZPA