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

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Home affordability fluctuates across the country

Home affordability fluctuates across the country

The lastest Massey University Home Affordability Report shows mixed results, with improvements in affordability for all regions except Northland, Hawke’s Bay and Central Otago Lakes in the most recent quarter.

Of these regions, only Hawke’s Bay has shown a decline in affordability for two consecutive quarters. However, over a 12-month period, all regions except Canterbury/Westland have become more unaffordable.

Report author Associate Professor Graham Squires says the changing picture across the country makes it hard to make predictions for the longer term.

“Given the mixed results, it is too early to tell whether the longer-term trend is declining affordability, particularly as house prices continue to rise significantly in some regions.”

The report, which covers the period from December 2017 to February 2018, shows fluctuations in median house prices were the main driver of changes in affordability across the country. Most regions saw a quarterly decline in median house price but there were increases in Northland ($25,000), Hawke’s Bay ($29,950) and Central Otago Lakes ($53,500).

“When you look at the year-on-year changes in house prices, however, there has been a national increase of $35,000 in the median house price value,” Dr Squires says.

Advertisement - scroll to continue reading

“We saw a resurgence in house prices for many regions last quarter, followed by a fall-back for some and a rise for others in this quarter. The very different sub-market characteristics of regional property may play a role in this regional volitility – particularly when we look at Hawke’s Bay and Central Otago Lakes compared to the dominant market of Auckland.”

The country’s most affordable regions (Southland, Manawatū/Whanganui and Taranaki) remain unchanged, as do its least affordable regions (Central Otago Lakes and Auckland).

“The surge in house prices in Central Otago Lakes means the region is now a record 81 per cent less affordable than the rest of the country,” Dr Squires says. “The region’s median house price is now 15.4 times its average annual wage, compared to Auckland where house prices are 13.1 times annual wages.”

While affordability concerns are growing in Northland and Hawke’s Bay, house price-to-income ratios in these regions – at 8.0 and 7.4 respectively – are still considerably more favourable than Central Otago Lakes and Auckland.

“While the situation is changing from quarter to quarter, it is clear that New Zealand home affordability is still a national and regional problem in the short and medium term,” Dr Squires says.

The full report can be downloaded from here: http://bit.ly/home-affordability-apr2018

An infographic summary of the report can be viewed here: https://youtu.be/DlDFriUjWsA

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
 
 
 
 
 
 
 
 
 
 
 
 

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.