Graham Squires
Auckland, January 27, 2018
The latest Massey University Home Affordability Report suggests that last quarters fall in house prices was just a blip in an otherwise upward trend.
The report, which covers the period from September to November 2017, shows median house prices increased in all New Zealand regions over the past 12 months and, in the most recent quarter, prices grew in every region except Central Otago Lakes.
It is interesting to see the fall in house prices in many regions last quarter hasnt continued.
All the past and current data indicates the dip in prices was just a blip, and the longer term trend is decreasing affordability.
We would argue that this trend rising house prices and houses becoming more unaffordable is actually business as usual.
Marginal improvements
All regions showed a decline in affordability over the past year and only Hawkes Bay and Nelson/Marlborough showed small improvements over the most recent quarter. The biggest declines in affordability this quarter were in Taranaki (at 9.8%) and Wellington (at 8.6%).
New Zealands capital experienced the largest quarterly median house price increase at $48,000. The only regional decline during the same period was in Central Otago Lakes, where the median house price dropped by $3500.
However, this small drop in price will not bring much relief to those looking to purchase a house in the region.
Central Otago Lakes, which includes Queenstown, is still the most unaffordable region in New Zealand. Its 69 per cent less affordable than the rest of the country and the median house price there is now 15 times annual wages.
The Trend
Rising house prices have continued to impact Aucklands affordability; the countrys largest city is now 53 per cent less affordable than the rest of New Zealand, and the median house price is 13.5 times annual wages in the city.
Southland and Manawat/Whanganui remain New Zealands most affordable regions, although both experienced declines in affordability over both the quarterly and annual time periods.
Download the full Massey University Home Affordability Report
Associate Professor Graham Squires is from the School of Economics and Finance at Massey University.
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Picture Courtesy: Real Estate Agents Authority, Wellington
