Home Loan Affordability report - interest.co.nz
interest.co.nz Home Loan Affordability report
Owning a home is now more within reach for first home buyers in Auckland as prices tumble and interest rates remain low
PLEASE NOTE: The new http://www.interest.co.nz/property/home-loan-affordability covering a) First home buyers (aged 25-29 yrs), as a couple, b) second rung Young family buyers (aged 30-34), as a couple (with one partner working full time, one half time, and a 5 year old child), and c) second rung older families (aged 35-39) are now published on our website.
The dream of buying a home of their own became more achievable for many first home buyers last month thanks to falling prices in many parts of the country, but particularly in the North Island
The Real Estate Institute of New Zealand's national lower quartile selling price dropped from $375,000 in December to $353,000 in January, a decline of 5.9%.
According to interest.co.nz's Home Loan Affordability Reports, that reduced the mortgage payments on a house purchased at the lower quartile price from $361.88 a week in December to $339.27 a week in January, a saving of $22.61 (-6.25%).
Around the country, the Real Estate Institute of New Zealand's lower quartile selling prices declined in seven regions in January compared to December (Auckland, Waikato, Bay of Plenty, Hawke's Bay, Taranaki, Wellington and Nelson/Marlborough) and increased in five (Northland, Manawatu/Whanganui, Canterbury, Otago and Southland).
The regions where the lower quartile price rose the most were Northland +$11,000, Manawatu/Whanganui +$10,000 and Otago +$10,000, while areas with the biggest declines were Bay of Plenty -$35,000, Wellington -$30,000 and Waikato -$24,500.
Prices down across much of Auckland
Within the Auckland region the lower quartile selling price in January was down compared to December in all districts except Rodney in the north and Papakura in the south.
The biggest decline was in South Auckland where the lower quartile price dropped by $63,000 in January, followed by Central Auckland -$43,000, North Shore -$25,000, Franklin -$25,000 and West Auckland -$15,214.
In Rodney the lower quartile price was up $40,000 and in Papakura it rose $29,000.
The latest falls in house prices combined with low mortgage interest rates means that large parts of Auckland are now considered affordable for first home buyers.
The Home Loan Affordability Reports estimate what the mortgage payments would be on homes purchased at the lower quartile selling price, and how much that would take out of the take home pay of a couple earning the median wage for people for aged 25 to 29 in that region.
Rodney, the North Shore & West Auckland still unaffordable
Properties are considered affordable if the mortgage payments take up no more than 40% of take home pay.
By that measure, Auckland's central suburbs and South Auckland, Papakura and Franklin are all considered affordable for first home buyers, but Rodney, the North Shore and West Auckland remain unaffordable.
It may seem surprising that Central Auckland makes the affordable list, but that will be because of the cheaper apartment and multi-unit properties that dominate the lower end of the market there.
Outside of Auckland, the only other place where housing is considered unaffordable for first home buyers in Queenstown, which is the second most unaffordable place in the country for first home buyers, just a tad behind Auckland's North Shore.