Home affordability improves, for now
Low interest rates are putting more homes within reach of New Zealanders, according to the latest Home Affordability Report from Massey University.
The national affordability index improved by 20.3 per cent on last year, which spelt out good news for first homebuyers.
Over the quarter ending 30 November 2009 the all districts national affordability index improved by 2.6 per cent, compared to a 2.3 per cent improvement in the quarter ending August 2009.
The November quarter recorded a 0.3 per cent increase in the average weekly wage, a 2.3 per cent increase in the national median house price and a 4.5 per cent reduction in the average weighted mortgage interest rate. However, the more hawkish statement recently issued by the Reserve Bank makes it increasingly unlikely the current low interest rate environment will be sustainable through 2010.
Over the last quarter eight out of twelve regions showed improvements in affordability: Taranaki 14.8 per cent, Central Otago/Lakes 13.5 per cent, Southland 11.0 per cent, Otago 8.0 per cent, Wellington 5.1 per cent, Waikato 4.6 per cent, Nelson/Marlborough 2.3 per cent and Auckland 0.7 per cent.
Regions showing quarterly reductions in affordability were Northland 15.0 per cent, Hawkes Bay 3.9 per cent, Canterbury/Westland 1.4 per cent and Manawatu/ Wanganui 1.2 per cent.
On an annual basis all districts’ national affordability index improved.
Regional improvements were led by Central Otago/Lakes 34.1 per cent, with Hawkes Bay 27.7 per cent in second place and Manawatu/Wanganui 27.1 per cent in third. The remaining regions were ordered as follows; Nelson/Marlborough 26.5 per cent, Taranaki 22.2 per cent, Canterbury/Westland 21.7 per cent, Otago 20.4 per cent, Wellington 19.4 per cent, Waikato/Bay of Plenty 19.2 per cent, Northland 18.8 per cent, Auckland 16.3 per cent, Southland 13.4 per cent.
Central Otago Lakes remains the least affordable region with an index of 135.9 per cent of the national average. Next was the Auckland region at 124.9 per cent followed by Northland 104.8 per cent for the first time in the top three and displacing Nelson/Marlborough 101.9 per cent.
Southland retains its place as the most affordable region with an index of 58.8 per cent of the national average with Otago in second place at 70.7 per cent closely followed by Manawatu/ Wanganui in third at 70.0 per cent.