Recent property prices falls in New Zealand mean that houses are more affordable with the national median home price now touching $350,000.
House prices have fallen nationally $10,000 in the past three months, according to the latest home affordability report from Massey University.
In the past three months, seven out of 12 regions showed improvements in affordability. Canterbury/Westland at 9.1%, Waikato/Bay of Plenty 4.9%, Auckland 4.8%, Nelson/Marlborough 0.7%, Otago and Wellington both at 0.6% and Manawatu/Wanganui 0.5%.
It shows that Queenstown, Auckland and Wellington are the most expensive places when house prices are matched to average wages and average mortgage interest rates. Invercargill, Dunedin and Palmerston North are the most affordable.
The director of the university’s real estate analysis unit, Professor Bob Hargreaves, said that in the three months to February Central Otago Lakes was the least affordable region, followed by Auckland and Wellington.
Southland retains its place as the most affordable region. Otago is in second place and Manawatu/Wanganui third. While nationally, home affordability improved in the quarter by 5.2%.
Professor Hargreaves said the figures were good news for house buyers as mortgage rates went down and wages increased. Average monthly mortgage interest rates decreased from 6.63% to 6.59% and the average weekly wage increased from $972.69 to $991.05 in the quarter, 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.
He warned against trusting the Canterbury/Westland figures, which he said showed a small number of house sales in a market disrupted by the earthquakes.
Real Estate Institute figures out last month showed the national housing market staged a modest recovery in February compared with January, but volumes halved in earthquake hit Canterbury.
The median price of $350,000 was unchanged from February last year but was up $10,000 on January, the institute said. In February, 4,502 unconditional sales were reported, up 38% on January, but up 45% if the Canterbury/Westland region is excluded.
Sales though are down considerably on the boom years of the 1990s when 10,000 houses a month were selling.