Article in TVNZ Television New Zealand on Housing Affordability
Home affordability has plummeted in many regions across the country over the past year, according to a report previously used by the Government to defend its housing policy.
Massey University’s latest Home Affordability Report shows homes in most regions have become less affordable in the June quarter, with overall affordability down an average of 9.6 per cent across New Zealand.
The Central Otago Lakes area surpassed Auckland as the least affordable place in the country in the index, with a 10.5 per cent decline in the quarter.
In Auckland, affordability fell by 4.5 per cent in the period.
The index takes into account the cost of borrowing – including interest levels – along with wages and house prices to figure out how easy it is to buy a home in each region.
The report found affordability in Northland had plunged 32 per cent in the year to June, Hawke’s Bay by 23.6 per cent, and was down 23.2 per cent in the Nelson-Marlborough region.
Homes had become 17.5 per cent less affordable in the Waikato and Bay of Plenty, and there were double-digit drops in almost every region apart from Auckland (down 5.4 per cent) and Taranaki (down 4.6 per cent).
The Canterbury-Westland area was the only one to improve over the year, up by 0.5 per cent, due to falling median house prices.
“House prices to wages remain very high and this factor continues to place considerable strain on first home buyers,” the authors said.
“Median house prices are now more than 15 times annual wages for the Central Lakes Otago region, and over 13 times annual wages for the Auckland-Thames-Coromandel region.”
AFFORDABILITY OVER THE PAST YEAR:
* New Zealand: down 8.2 per cent
* Northland: down 32.0 per cent
* Auckland: down 5.4 per cent
* Waikato/Bay of Plenty: down 17.5 per cent
* Hawke’s Bay: down 23.6 per cent
* Taranaki: down 4.6 per cent
* Manawatu/Whanganui: down 15.7 per cent
* Wellington: down 15.3 per cent
* Nelson/Marlborough: down 23.2 per cent
* Otago: down 14.8 per cent
* Central Otago Lakes: down 10.5 per cent
* Southland: down 16.9 per cent
* Canterbury/Westland: up 0.5 per cent
(A decrease means homes are less affordable)