New Zealand has recorded a decline in housing affordability, but the country’s least affordable region is bucking that trend, according to a new study.
According to Massey University’s latest Home Affordability Report, the median house price in Central Otago Lakes dropped by $67,000 in the March to May quarter, leading to the region’s first improvement in affordability since August last year.
Despite this, Central Otago Lakes continues its reign as the least affordable place to live, and is 51% less affordable than the rest of New Zealand. Auckland follows some way behind, at 43% less affordable than the rest of the country.
“The slowdown and improvements in affordability in high-value areas may be associated with a saturated market in these regions,” report author Associate Professor Graham Squires said. “Although we should also be mindful that Central Otago Lakes is quite volatile and experienced an increase in median house price of $50,000 in just the previous quarter.”
The report suggests rising house prices still to blame for the overall decline in affordability, with annual price increases across most regions. This has led to a national decline in affordability of 5.8% for this last quarter, and 1.1% for the past year.
Northland showed the largest decline in affordability, at 7% over the most recent quarter, due to a median house price increase of $27,000. Median house prices in Wellington, Otago and Manawatu/Whanganui recorded increases of over $20,000.
Only five out of 13 regions showed affordability improvements, including Central Otago Lakes, Auckland and Hawke’s Bay.
Besides Northland, the most significant declines in affordability were in the regions of Manawatū/Whanganui, at 6%, and Otago at 4%. Southland (54%), Taranaki (43%) and Manawatū/Whanganui (41%) remain the country’s most affordable regions.
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