The latest research from Massey University reveals that housing conditions have continued to decline over the past year in New Zealand. The university’s Home Affordability Report revealed that many of New Zealand regions have become less affordable over the most recent quarter (March-May 2017).
Across the country, the median house price rose 9.1% in the last quarter with the exception of the Otago region which improved by 1.9%.
The report measures affordability based on house prices and borrowing costs compared to wages and does not take into consideration the deposit needed to purchase a property.
The cause of the housing affordability decline across the country is attributed to rising house prices.
Price increases are driving housing unaffordability growth around the country past that of Auckland. Author of the report, associate professor Graham Squires from Massey’s school of Economics and Finance, says “year-on-year median house prices in Northland have increased by 28.3% and in Nelson, prices are up 21.8%. This compares to a 3.7% increase in Auckland.
Auckland, however, still remains 48% less affordable than the rest of the country. First home buyers will still face considerable challenges when entering the property market with median house prices at 15.2 times annual wages for the Central Otago Lakes region and 13.3 times annual wages for Auckland.
The most affordable region in the country is Southland despite an increase in median house price in the last quarter with prices increasing by 14.8% or $31,000.