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Reports show a rise in prices and interest rates

Home Loan Affordability Reports show a rise in prices and interest rates at the end of last year made it harder for first home buyers to get their own home


PLEASE NOTE: The new 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.


Rising lower quartile selling prices and higher mortgage interest rates pushed the dream of home ownership further out of reach for aspiring first home buyers at the end of last year, according to's Home Loan Affordability Reports for December.

The reports found that the Real Estate Institute of New Zealand's lower quartile selling price hit record or record-equaling highs in five regions in December: Auckland, Bay of Plenty, Hawke's Bay, Wellington and Canterbury, while the average of the two year fixed mortgage rates offered by the major banks rose for the second month in a row.

That combination of rising prices and rising mortgage interest rates meant home loan affordability worsened in seven regions in December: Auckland, Bay of Plenty, Hawke's Bay, Taranaki, Wellington, Nelson/Marlborough and Canterbury, compared to November.

However lower quartile prices went against the trend and declined in five regions in December compared with November: Northland, Waikato, Manawatu/Whanganui, Otago and Southland, which improved affordability for first home buyers in those regions.

The lower quartile price falls were substantial in three of those regions, Northland where it dropped from $385,000 in November to $342,000 in December, Otago where it dropped from $348,000 to $306,000, and Southland where it fell from $205,000 to $174,000.

In Waikato and Manawatu/Whanganui the lower quartile price falls in December were minor.

Overall, the figures suggest a worsening situation for typical first home buyers on average wages.

In Auckland, where housing pressures are greatest, the lower quartile selling price rose for five consecutive months, from $654,000 in July to $680,000 in December, which equaled the record high set in March 2017.

In the Waikato, the lower quartile price dropped marginally from November's record high of $414,000, to $412,500 in December, suggesting prices there remain around their record.

In the Bay of Plenty the lower quartile price rose steadily last year to finish at a record $458,000 in December compared to $400,000 in January, and in Wellington the lower quartile price also rose steadily last year, from $370,000 in January to $468,000 in December.

Even in Canterbury, where the market was flat for much of last year, the lower quartile price finished the year on a record high of $365,000 in December.


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