Home affordability improves, except in Auckland
BUSINESSDESK: Auckland is the only region in New Zealand where home affordability has declined over the past year, according to Massey University Real Estate Home Affordability Report.
The all districts national affordability index improved 4.9% in the 12 months ended August 31 compared to 2.9% a year earlier. Auckland bucked the trend, recording a 0.4% decrease in affordability.
"House prices in Auckland are increasing faster than other regions due to the imbalance of new supply to meet demand from the increasing population," director of Massey's Real Estate Analysis unit Bob Hargreaves says.
"In the short run, while interest rates stay low and builders aren't building, houses prices will continue to rise in Auckland."
Low interest rates are encouraging first home buyers to enter the market, which is putting pressure on the housing market, he says.
Helping offset a $1000 average increase in house prices was a $6.25 increase in the average weekly wage and a decrease in average monthly mortgage rates to 5.84%.
Affordability increased by 2.8% nationwide in the three months ended August 31.
Regional quarterly improvements were led by the Manawatu/Wanganui region up 9.4%, followed by Hawke's Bay on 8.4% and Waikato rising 4.9%.
Housing affordability deteriorated in the August quarter, with Northland down 3.7%, Wellington 1.4% and Southland 0.5%.
The Real Estate Institute said yesterdayNew Zealand house sales rose 8% in September, with a shortage of listings causing buyers to make rapid decisions and lifting prices to record levels in the Auckland and Nelson/Marlborough regions.
The national median house price rose 5% to $371,000.
Quotable Value, the government valuer, will release its monthly property values later today.