Latest Home Loan Affordability report shows "worsened" situation
Home ownership has been less affordable for first-home buyers in most parts of the country in October, according to interest.co.nz’s latest Home Loan Affordability report.
The report suggests the average of the two-year fixed mortgage rates charged by the major banks declined to 4.47% in October, down from 4.51% in September. However, rising property prices reportedly have taken the shine off falling mortgage rates.
The main driver has been the record high increase in the Real Estate Institute of New Zealand national lower quartile selling price, which was up to $390,000 in October from $380,000 in September. The rises in house prices were recorded in eight regions around the country (Northland, Auckland, Waikato, Hawkes Bay, Taranaki, Manawatu/Whanganui, Canterbury, and Otago.)
The report also revealed worsened home loan affordability for typical first-home buyers over the last six months in 11 of 12 regions across the country. The Bay of Plenty is the only region to buck the trend, with its lower quartile price declining from $430,000 in April to $420,000 in October.
“But for aspiring first home buyers everywhere else, the latest figures make for glum reading,” it noted. “They will be a disappointment to those who had hoped that the subdued winter housing market would lead to a fall in prices and improved affordability but they also have implications for borrowers generally.”
