Regional house prices play catch up

Thursday 15 April 2004

The continuing rise of house prices in the South Island contributed to a decline in affordability in the quarter ending March 2004, according to the latest AMP Home Affordability Report. This contrasts with an overall national improvement of just over 2%.

By The Landlord

Canterbury/Westland recorded the steepest home affordability decline at 12.2%, followed by Otago, down 11.2% and Southland, down 1.4%.

However, one South Island region reported a quarterly affordability improvement. This was Nelson/Marlborough, up 2.2%.

All regions reported an increase in Median Dwelling Prices over the past year. For the second consecutive quarter the South Island led the market up with a strong annual lift in house prices. Otago was up 48.3%, followed by Southland (39.5%) and Canterbury/Westland (35.1%).

AMP Financial Services general manager finance Stewart McRobie said, "During the 1990s the regional market relativity became quite distorted. The South Island lagged behind in the economic growth stakes and this kept house prices down, and home affordability up. But times have changed, particularly since the commodity price improvements from three years ago. The substantial rises in house prices across the South Island have begun to have a significant impact on home affordability."

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