Scoop has an Ethical Paywall
Licence needed for work use Learn More

Local Govt | National News Video | Parliament Headlines | Politics Headlines | Search

 

Auckland and Central Otago vie for least affordable region

Thursday, October 13, 2016
Auckland and Central Otago vie for least affordable region

Auckland and Central Otago Lakes continue to top the Massey University Home Affordability Report index by a considerable margin. At 62 per cent and 61 per cent less affordable than the rest of New Zealand, the margin of difference between these two regions and the rest of the country is reaching unprecedented levels.

Massey University senior property lecturer and report author Susan Flint-Hartle says demand continues to drive median house prices up, making entry into the Auckland market a challenge.

“Auckland has hit a new high median for this quarter of $842,500 in August, which represents a 13.85 per cent increase, or over $100,000, over the past 12 months. The median house price in Auckland is now 13.5 times median annual household income, which will continue to place strain on first home buyers in our largest city.”

The report, which covers the period from June 2016 to August 2016, also shows that affordability in Central Otago Lakes has declined by nearly 21 per cent over the past year ¬– the largest drop for any region in New Zealand.

“The decline in affordability in Central Otago Lakes is exacerbated by the booming tourism industry putting stress on the supply of affordable housing,” Dr Flint-Hartle says.

While most of the country, including Auckland, has shown modest improvements in affordability over the 12-month period, largely due to steady reductions in the Official Cash Rate (OCR), the Waikato/Bay of Plenty region joins Otago Central Lakes in becoming less affordable over the same period.

Advertisement - scroll to continue reading

“The Waikato is 4.7 per cent worse off than one year ago, despite considerably lower borrowing costs,” Dr Fint-Hartle says. “Worsening in affordability here can be attributed to a spillover from Auckland as those locked out of the Auckland market look to areas closely connected to the city.”

While increases in house prices in many regions are significantly outstripping wage growth, Dr Flint-Hartle says reductions in the OCR are, to some extent, easing the burden for home owners.

“This, of course, is not much comfort for first home buyers keen to buy in our two most expensive regions. They are facing more stringent deposit requirements, markets characterised by intense competition and a lack of supply.

“Cheaper borrowing also holds the potential to push house prices higher if demand for housing continues to grow. This could lead again to a deterioration in housing affordabiilty as we move into the summer period.”

Least affordable region: Auckland – 62% lessaffordable than the rest of the country.
Most affordable region: Manawatū/Whanganui – 54% more affordable than the rest of New Zealand.

Download the report: http://bit.ly/home-affordability-sept2016

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 
 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured News Channels


 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.