Housing has become more affordable for first-home buyers across New Zealand, according to the latest interest.co.nz Home Loan Affordability Report.
According to the report, movements in affordability were mainly driven by changes in the Real Estate Institute of New Zealand's (REINZ) lower quartile selling price, which dropped slightly in May in nine regions compared to April in eight regions, improving affordability in those regions.
In May, the Bay of Plenty, Hawkes Bay, Manawatu/Whanganui, Wellington, Nelson/Marlborough, Canterbury, Otago and Southland recorded the most improved affordability. This was driven by price falls and a modest fall in average mortgage rates by major banks.
However, the report also shows that lower quartile price was up in in four regions compared to April, suggesting worsening affordability in those places.
In the Waikato, Northland, Auckland and Taranaki regions lower quartile price increased in May compared to April. In the latter three cases, the price rises more than offset the effect of the fall in average mortgage rates, leading to a worsening of affordability in those regions.
Auckland and Queenstown remained the only region in the country where housing is considered unaffordable for typical first-home buyers on median incomes because the mortgage payments on a lower quartile-priced home would eat up more than 40% of their take-home pay.
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