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Home mortgage affordability: it's still good news

House prices may be continuing to rise, but buying a home is still a lot more affordable than it was a year ago.

Friday, April 23rd 1999, 12:00AM

by Paul McBeth

House prices may be continuing to rise, but buying a home is still a lot more affordable than it was a year ago.
The latest AMP Home Mortgage Affordability report shows that the March index for New Zealand remained close to a record low (a low index figure signals more affordable housing). Over the past three months, firmer house prices were largely offset by low interest rates and higher wages.
Massey University's Real Estate Analysis Unit prepares the report quarterly for AMP, combining regional statistics on average weekly earnings, mortgage interest rates and housing prices to come up with a measure of home affordability.

Highlights of the latest report include (see table below for regional details):
  • The March affordability index for New Zealand overall was 36.2% higher than last year and home affordability has improved in every region since then.
  • However, over the past quarter, just two of the eleven regions (Northland and Waikato/Bay of Plenty) improved in affordability.
  • That was thanks to falls in the median house price in those areas, while increased house prices in all other regions slightly reduced their affordability over the quarter.
  • Nationwide, median house prices rose 1.2% over the past three months and total dwelling sales were up 21% on the same period last year, the first sales increase since the 1997/98 sales downturn.
  • Average weekly wages also increased, by 1.8% over the quarter.
There were no surprises that the Auckland region remains home to the least affordable housing. However, the situation has only worsened only slightly in the past three months (a drop of 2.1% in the index), while homebuyers are still substantially better off than a year ago (a 41% improvement in the index).
The regions, in order from most to least affordable (remember, the regions with index figures have more affordable housing):

 

REGION

 

Current index

Improvement (decline) over

Last quarter

Last 12 months

Southland

8.28

(7.7%)

26%

Otago

9.78

(3.2%)

37.6%

Taranaki

10.27

(9.1%)

32.5%

Manawatu/Wanganui

11.38

(3.9%)

33%

Northland

13.91

6.1%

42.4%

Nelson

14.17

(3.9%)

42%

Hawkes Bay

14.53

(10.0%)

34.2%

Canterbury/Westland

15.03

(4.5%)

36.0%

Wellington

15.49

(3.3%)

36.5%

Waikato/BOP

15.64

2.2%

37.9%

Auckland

21.24

(2.1%)

41.0%

Regional data used to produce the index:
  • Monthly median dwelling prices from the Real Estate Institute of New Zealand
  • Average weekly earnings data from Statistics New Zealand
  • Average monthly mortgage interest rates from Statistics New Zealand.

Paul is a staff writer for Good Returns based in Wellington.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ ▲8.15 ▲6.79 ▲6.45 ▲6.29
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 6.39 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society ▼8.10 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.24 6.09 5.69

Last updated: 1 November 2024 2:24pm

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