By Dan Satherley
Houses in Auckland are the most unaffordable in New Zealand, according to Massey University’s latest home affordability report.
Affordability in Auckland deteriorated 5.8 percent in the last quarter, allowing the country's largest city to overtake the Central Otago Lakes district as the least affordable in New Zealand.
The home affordability index is calculated using interest rates, wages and house prices.
Across New Zealand, affordability dropped 1.9 percent as the median house price rose 3 percent, more than offsetting a $6.21 increase in average wage and a decrease in the average mortgage interest rate from 6.21 percent to 6.15 percent.
Massey University's Prof Bob Hargreaves says it is surprising that house prices are increasing in several regions in view of the financial turmoil in Europe.
“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.
The easiest places to buy a house are Southland and the Manawatu.
Affordability deteriorated in Hawkes Bay by 11.4 percent, Auckland 5.8 percent, Manawatu/Wanganui 4.8 percent, Wellington 3.3 percent, Canterbury/Westland 2.6 percent, Nelson/Marlborough 2.4 percent, Otago 0.3 percent and Taranaki 0.1 percent.
Improvements were noted in Otago/Lakes 9.9 percent, Waikato/Bay of Plenty 4.0 percent, Northland 2.4 percent, and Southland 0.9 percent.
Over the last 12 months, affordability has increased 9.1 percent.
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