12-01-2012

Auckland has overtaken Central Otago Lakes as the least affordable place to buy a house, according to the latest Massey University home affordability report.

 

Massey University calculates affordability by examining interest rates, wages and house prices, and found that over the last quarter four of the twelve regions showed improvements in affordability.

 

Auckland affordability deteriorated by 5.8% over the quarter, second only to Hawkes Bay with an 11.4% decline in affordability.

 

On a nationwide basis, affordability decreased by 1.9% over the quarter ending November 2011, with the report citing a 3% rise in the national median house price which offset a $6.21 increase in average wages and a fall in the average monthly interest rate from 6.21% to 6.15%.

 

Massey University economics and finance professor Bob Hargreaves said given the economic turmoil in Europe, "it is a little surprising house prices - Auckland in particular - are increasing."

 

He said one reason for the increases was a rise in buyers active in the market thanks to low mortgage interest rates and more relaxed lending criteria.

 

"Also, new construction is still at a very low ebb," he said.

 

With an index of 126.9%, Auckland was the least affordable region followed by Otago/Lakes (123.2%) and Nelson/Marlborough (100.3%).

 

Retaining its place as the most affordable region was Southland with an index of 57.1% followed by Manawatu/Wanganui (69.7%) and Otago (71.5%).