Home affordability improves, except in Auckland

Home affordability improves, except in Auckland

By Hannah Lynch

Oct. 9 (BusinessDesk) - Auckland is the only region in New Zealand where home affordability has declined over the past year, according to Massey University Real Estate Home Affordability Report.

The all districts national affordability index improved 4.9 percent in the 12 months ended Aug. 31 compared to 2.9 percent a year earlier. Auckland bucked the trend, recording a 0.4 percent decrease in affordability.

“House prices in Auckland are increasing faster than other regions due to the imbalance of new supply to meet demand from the increasing population,” director of Massey's Real Estate Analysis unit, Bob Hargreaves. “In the short run, while interest rates stay low and builders aren’t building, houses prices will continue to rise in Auckland.”

Low interest rates are encouraging first home buyers to enter the market, which is putting pressure on the housing market, Hargreaves said.

Helping offset a $1,000 average increase in house prices was a $6.25 increase in the average weekly wage and a decrease in average monthly mortgage rates to 5.84 percent.

Affordability increased by 2.8 percent nationwide in the three months ended Aug. 31.

Regional quarterly improvements were led by the Manawatu/Wanganui region up 9.4 percent, followed by Hawkes Bay on 8.4 percent and Waikato increasing 4.9 percent.

Housing affordability deteriorated in the August quarter in Northland down 3.7 percent, Wellington 1.4 percent and Southland slipped 0.5 percent.

On Monday, the Real Estate Institute said New Zealand house sales rose 8 percent in September, with a shortage of listings causing buyers to make rapid decisions and lifting house prices to record-highs in the Auckland and Nelson/Marlborough regions. The national median house price rose 5 percent to $371,000.

Quotable Value, the government valuer, will release its monthly property values this afternoon.

(BusinessDesk)

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