home Loan Affordability - June 2007

Media Release from www.interest.co.nz
 
EMBARGOED UNTIL  1 :00 PM TODAY, 19 JULY, 2007
 

 
Today, we have released the July update for this index which tracks this key issue until June 2007.
 
What we found is unaffordability has gotten worse in the last month in many communities throughout New Zealand although it has eased in some.  It now takes 81.2% of an average take-home pay to afford the mortgage on a median priced house. This is up from 79.4% in May, and 68.2% in June 2006. Five years ago in June 2002 it was 45.3%. 
 
The RBNZ's OCR increase on 7 June, saw mortgage interest rates spike up sharply over this period. This contrasted with stable or slightly reducing median house prices.
 
National median house prices fell slightly to $347,500, although these changes were not evenly felt across the country. For example, the fastest rises were in Manawatu-Wanganui, whereas Auckland  and Wellington recorded slight falls.
 
 
This same Report shows how much of lifetime earnings are required to purchase a median priced house, another important benchmark of affordability. There are international benchmarks for this published by Demographia.
 
For more on this important topic,
see the full Report which you can find here >>> http://www.interest.co.nz/HLA/HLA-NZ-July2007.asp

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