First-time homebuyers and other buyers in the market would be pleased to know that homes are becoming more affordable in many parts of the country, according to a Massey University Real Estate Analysis Unit Study.
A Report accompanying the Study however said that some of the improvements seen in recent months could be short-lived.
“Increased turnover rates indicate that demand is causing pressure in some parts of the housing market, particularly in Auckland and Christchurch,” it said.
According to the Unit’s director Professor Bob Hargreaves, national affordability improved by 4.9%, with seven of the 12 regions showing improvements during the first two months in 2012.
“The trend is even more pronounced when viewed on an annual basis, with national affordability improving by 8.8%. Of the 12 regions, only Canterbury has declined in affordability over the past year,” he said.
Southland led the regional quarterly improvements (9.1%), followed by Auckland (6%), Otago (4.9%), Canterbury/Westland (4.7%), Central Otago/Lakes (3.4%), Manawatu/Wanganui (2.9%) and Taranaki (1.7%).
However, housing affordability deteriorated in five regions over the past quarter, including Northland (3%), Hawke’s Bay (2.9%), Nelson/Marlborough (1.2%), Wellington (0.5%) and Waikato/Bay of Plenty (0.4%).
Professor Hargreaves said that all three drivers of affordability improved during the first quarter. The national median house price fell to $355,000. There was $4.06 increase in the average wage and the average monthly mortgage rate decreased from 6.15% to 6.08%.
“It seems historically low mortgage rates, combined with more relaxed lending criteria by the banks, are bringing more first-time buyers into the market. Interest rates however will not remain this low indefinitely,” Professor Hargreaves said.
He said that at 125.3% of the national index, Auckland has retained its place as the country’s least affordable region, followed closely by Central Otago/Lakes at 125.1%.
“Southland is still the most affordable place in New Zealand to buy a house with an index of 54.5%, with Manawatu/Wanganui in second place at 71.27%.”