Housing affordability improving

It has issued its latest Real Estate Analysis Unit report, evaluating affordability based on house prices, interest rates and average incomes.

During the third quarter, ending August 2012, national affordability improved by 2.8%, and eight of the 12 regions also showed improvements.

Affordability improved nationally by just under 5% over 12 months.

And despite Auckland’s overall 0.4 per cent deterioration in affordability in the past year, the region has seen a 2.7% improvement in the last three months.

Director of the unit, professor Bob Hargreaves, said: “House prices in Auckland are increasing faster than other regions due to the imbalance of new supply to meet demand from the increasing population. In the short run, while interest rates stay low and builders aren’t building, houses prices will continue to rise in Auckland.”
He said low interest rates were also a factor.

Regional quarterly improvements were led by Manawatu/Wanganui (9.4 per cent), followed by Hawkes Bay (8.4 per cent), Waikato (4.9 per cent), Taranaki (3.9 per cent), Nelson/Marlborough (3.6 per cent), Auckland (2.7 per cent), Otago/Lakes (1.4 per cent) and Otago (0.7 per cent).

In four regions housing affordability deteriorated over the past quarter: Northland (3.7 per cent), Wellington (1.4 per cent), Southland (0.5 per cent) and Canterbury/Westland (0.3 per cent).