The latest Massey University Home Affordability Report underlines New Zealand’s “two-track housing experience”, says its author Professor Paul Gallimore from Massey’s School of Economics and Finance.
Figures from the most recent quarter – December 2014 to February 2015 – show an improvement in affordability across New Zealand of six per cent, but Auckland and three other regions bucked this trend.
“When you look at the past 12 months, houses in Auckland are now over 22 per cent less affordable while, for the country as a whole, the annual deterioration in affordability is only 10.4 per cent,” Professor Gallimore says. “These figures underline the ongoing two-track housing experience of New Zealanders.”
Over the past year the 10.4 per cent fall in affordability has been driven by a modest 3.6 per cent rise in house prices and a 0.5 per cent rise in interest rates, which outstripped the 2.3 per cent increase in the average weekly wage.
“But the situation in Auckland is quite different – wages actually rose at less than the national average while the median house price rose by a substantial 14 per cent, or $83,000,” Professor Gallimore says.
“The recent improvement in affordability in many regions really accentuates the high costs in Auckland. Our largest city is now 49 per cent less affordable that the rest of the country – and that’s a larger gap than we’ve had at any other time in the 25-year history of the Massey Home Affordability Report.”
Professor Gallimore says this divergence in regional experience is likely to continue throughout 2015.
“While house prices are currently dropping in some regions, that’s not the case everywhere – most notably in the country’s largest city,” he says.
“Will Auckland’s affordability continue to move apart from the rest of New Zealand? That will hinge on how supply and demand factors play out in that market, but the answer could well be yes.”
Download the entire Home Affordability Report, which provides regional data, at: http://bit.ly/home-affordability-mar2015
Least affordable region: Auckland – 49% more unaffordable than national average
Most affordable region: Southland – 52% more affordable than national average