Auckland now tops 'least affordable homes' list

Auckland now tops 'least affordable homes' list

Auckland has overtaken Central Otago Lakes as the least affordable region to buy a house, Massey University’s latest home affordability report shows.

In the past quarter, homes slipped further out of reach of buyers in Auckland while in Central Otago Lakes, which previously held the top spot, affordability improved.

The University’s home affordability index is calculated using the key drivers – interest rates, wages and house prices.

Nationally, affordability dipped 1.9 per cent in the past quarter as the national median house price went up by three per cent.

Report compiler Professor Bob Hargreaves, from the University’s School of Economics and Finance, says in view of the financial turmoil in Europe it is surprising that house prices are increasing in several regions, Auckland in particular.

“However, very low mortgage interest rates combined with more relaxed lending criteria are combining to bring more buyers into the market and new construction is still at a very low ebb,” he says.

Over the past quarter, four of the 12 regions showed improvements in affordability; Otago/Lakes 9.9 per cent, Waikato/Bay of Plenty 4.0 per cent, Northland 2.4 per cent, and Southland 0.9 per cent.

Affordability deteriorated in Hawkes Bay by 11.4 per cent, Auckland 5.8 per cent, Manawatu/Wanganui 4.8 per cent, Wellington 3.3 per cent, Canterbury/Westland 2.6 per cent, Nelson/Marlborough 2.4 per cent, Otago 0.3 per cent and Taranaki 0.1 per cent.

Annually, the all districts’ national affordability index improved by 9.1 per cent, compared with 8.4 per cent in the previous period. All 12 regions showed improved annual affordability.

Read the full report here.

ENDS

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