National affordability improves but regions vary

There was a $2000 reduction in the national median house price over the quarter, a 72c increase in the average wage rate and a reduction in the average mortgage interest rate from 5.57% to 5.52%.

But on a regional basis, half of New Zealand showed an increase in affordability and half a decrease.

The affordability figure is determined by comparing the average weekly earnings with the median house price and mortgage interest rate.

The six regions showed quarterly improvements in affordability were Central Otago/Lakes [6.2%], Wellington [3.7%], Southland [3.4%], Northland [3.2%], Auckland [2.2%] and Canterbury/Westland [0.7%]. Deterioration in quarterly affordability was evident in Hawkes Bay [7.4%], Manawatu [3.7%], Otago [3.3%], Taranaki [2.4%], Nelson/Marlborough [2.0%] and Waikato [0.4%].

Compared to the year before, national housing affordability improved 2.4%. But again there were regional differences.

Hawke’s Bay reported a big year-on-year decline in affordability, down 10.9%. But Southland’s affordability improved by the same amount and Central Otago/Lakes reported an increase in affordability of more than 11%. Auckland’s affordability declined 2.2% on the year before.

Auckland was the least affordable region, followed by Central Otago/Lakes and Nelson/Marlborough. Southland was the most affordable, at 52.3% of the national average. Manawatu/Wanganui came in second place and Otago third.