KEY POINTS:
Personal experience, through the unsuccessful auction of her classic Sandringham house, has made seller Rachel Jean wonder what the experts are talking about.
Rachel Jean said buyers were showing an interest in the house she owns with husband Paul O'Halloran at 8 Sandringham Rd.
But she questions whether Auckland houses are any more within people's grasp now than before.
Yes, she says, the price of money and housing is dropping but what about those huge deposits the main banks now want?
"Home affordability? That's okay if you've got the money. The trick is getting that deposit," said Rachel Jean, who has her own television production company.
A 4 per cent drop in the Real Estate Institute's national median house price in the year to November and a 3.5 per cent mortgage interest rate cut since March have technically made property a lot cheaper.
But that did not draw the crowds to Sandringham.
The couple plan to relist the house with a fixed price over $700,000, but Rachel Jean wonders who has the 20 per cent cash deposit or $140,000 banks now demand.
She works with a group of 20-somethings who she says have big student debts, sometimes up to $40,000.
Joining a group of like-minded young buyers to pitch in for a house will be the only way they will be able to buy in Auckland, she says.
Over in Westmere, Shelly and Mark Graham's designer duplex did not get a single bid at a Harcourts auction on Tuesday.
Mr Graham blames that on timing rather than lack of affordability.
The renovated 1940s brick house at 7 Winsomere Cres went on the market only three weeks before the auction, he says, and the lead-up to Christmas might not have been the best time to sell.
Despite getting no bidders, Mr Graham thinks affordability is on the improve.
"House prices and interest rates have dropped, so affordability has got to be improving," says Mr Graham, who has a publishing business.
He reluctantly acknowledged the $154,000 cash needed as a deposit on the place he wants $770,000 for might be out of some people's reach.
"But if they've just sold a house, yes they would have that amount, particularly if they've owned a place in the last four to eight years and generated plenty of equity," Mr Graham said.
Both houses are $700,000-plus so they are not in the first-home-buyer market
But an ASB housing confidence report on Wednesday found most people expecting lower house prices and lower interest rates next year.
Two other firms, both with vested interests in the market, also cited improving housing affordability.
The Wizard Home Loans Affordability report cited the sharp reduction in mortgage rates for driving housing last month to its best level of affordability in three and a half years.
On Wednesday, Wizard said it would cease offering new mortgages.
Then a survey of more than 550 landlords from Mike Pero and landlords.co.nz showed two-thirds thought interest rate cuts were making buying more attractive.
Mike Pero chief executive Shaun Riley said low interest rates were bringing between 50 and 100 per cent more people to his door now than last month.
Better weather, the prospect of change by the new Government and falling petrol prices are others factors being cited as cause for optimism.
Tim Carter, Barfoot's auction manager in Auckland, could hardly pause to speak as he headed for the mortgagee sale floor on Wednesday.
He acknowledged the misery involved in this process but said his agency tried to get the best result for everyone.
Agents have failed to record rising affordability sparking any major resurgence in sale volumes.
Selling 10,000 houses a month nationally is a thing of the last boom, and only about 4000 houses are being sold a month these days.
BNZ external relations manager Diane Maxwell says 20 per cent is a deposit yardstick these days.
"In most instances we'd be looking for 20 per cent - and the most competitive rates require 20 per cent.
"If someone can demonstrate a strong ability to repay we'd look at a higher loan-to-value ratio. Those loans would represent a very small part of the loan book."
BNZ and Kiwibank were this week offering six-month fixed mortgages at 6.49 per cent.
OUR CASTLES
* Our housing stock was valued at $614 billion last year.
* That's about four times the $164.7 billion value of our GDP.
* 70 per cent of household net wealth as a nation is in housing.
* In 2006, 187,000 working households could not buy.
* In 2006, home ownership levels stood at 67 per cent.
* By 2106, they are picked to be down to 61.9 per cent.
* Housing is a bellwether of social health and wealth.
(Data: Centre for Housing Research)
