Houses moving out of reach: survey

By ANNE GIBSON

Rising interest rates and soaring house prices are combining to make New Zealand houses less affordable, says the latest AMP Banking home affordability survey, out yesterday.

Seven of 11 regions surveyed in the March quarter recorded a decline, said AMP's head of retail banking, Michael Guggenheimer.

They were Auckland, Manawatu/Wanganui, Waikato/Bay of Plenty/Gisborne, Hawkes Bay, Canterbury/Westland, Otago and Southland.

The sudden 4.7 per cent downturn in the affordability index for the March quarter followed a record high in affordability in the December quarter, Guggenheimer said.

Key factors in declining affordability were home sales soaring to a six-year high for monthly sales in February and the Reserve Bank's raising the official cash rate 0.25 of a percentage point.

The quarterly report is prepared by Massey University's real estate analysis unit. It combines data on housing prices, mortgage interest rates and average weekly earnings to produce a home mortgage affordability index indicator.