Home affordability improved by 5.2% between December 2010 and February 2011 on a national scale but many parts of the country continued to remain beyond the reach of most New Zealanders, according to a Massy University Home Affordability Survey.
It said the median house price during the period under review was $350,000, down by $10,000 over the previous quarter.
“Central Otago Lakes is the least affordable region followed by Auckland and Wellington, while Southland retained its place as the most affordable region. Otago was in second place followed by Manawatu/Wanganui,” it said.
Professor Bob Hargreaves, the University’s Real Estate Analyst said that the average monthly mortgage interest rate was the second affordability driver.
It decreased from 6.63% to 6.59%, while the average weekly wage increased from $972.69 to $991.05, he said.
“The housing market continues to be characterised by very low turnover rates, flow- on effects from the Christchurch earthquakes, a firming of house prices in Auckland, expectations that mortgage interest rates will remain stable in the short term and an exodus of New Zealanders to Australia,” Professor Hargreaves said.
The Survey showed that the annual national affordability index improved by 6%, an increase of 4.8% over the previous ten out of 12 regions.
Professor Hargreaves said that during the past three months, seven out of 12 regions showed improvements in affordability; Canterbury/Westland 9.1%, Waikato/Bay of Plenty 4.9%, Auckland 4.8%, Nelson/Marlborough 0.7%, Otago and Wellington both 0.6% and Manawatu/Wanganui 0.5%.
He said the Canterbury/Westland data should be treated with caution since it reflected a small number of house sales in a market disrupted by the earthquakes.
“The five regions showing quarterly reductions in affordability were Southland 5.8%, Hawkes Bay 4.7%, Northland 4.6%, Taranaki 3.3% and Central Otago Lakes 1.7%,” Professor Hargreaves said.
