KEY POINTS:
Improvements in home affordability in the South Island indicate house prices around New Zealand could be peaking, according to a Massey University survey.
The latest quarterly report from the University's Property Foundation shows it became easier to buy homes in four regions - Central Otago-Lakes (6.6 per cent increase in affordability), Southland (4.8 per cent), Otago (2.2 per cent) and Waikato-Bay of Plenty (0.2 per cent) - in the three months to June.
However, affordability - a calculation using the average house price, wages and interest rates - declined in seven regions, including Auckland. Auckland remains the second least affordable region to buy a house after the Central Otago-Lakes district, which includes Wanaka and Queenstown.
Property studies lecturer Graham Crews said the cluster of southern regions with improved affordability signalled a plateau in property prices in the lower half of the South Island.
He expected some regions to follow suit, but said the country's "impressive economic performance" meant dairy regions like Taranaki and south Waikato, and larger cities like Auckland, would probably continue the upward trend.
An overall decline in affordability (11.9 per cent) was due to quarterly increases in the national median house price (4.1 per cent), the average weekly wage (1.4 per cent), and rises in weighted mortgage rates (1.25 per cent), Crews said.
