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Home affordability improves again

National home affordability improved for the third consecutive quarter and, for the first time in more than two years, all regions of New Zealand showed an improvement.

Wednesday, July 18th 2001, 11:55AM

by Jenny Ruth

National home affordability improved for the third consecutive quarter and, for the first time in more than two years, all regions of New Zealand showed an improvement.

That’s according to AMP Banking’s home affordability survey conducted by Massey University.

Its index, which combines data on housing prices, mortgage interest rates and average weekly earnings, showed an 11.1% improvement in the June quarter.

While in the March quarter the year-earlier comparison was still negative, homes in the June quarter were 8.6% more affordable than in the June quarter last year. That’s the first annual improvement since the September quarter of 1999.

"The report reinforces that it is an ideal time for first home buyers and existing home owners to consider purchasing," says AMP Banking marketing manager Karen Clough.

"The reduction in interest rates, combined with lower dwelling prices and a slight increase in the national average weekly wage, have resulted in an improved buyers' market. It's also a good time to be reviewing your home loan and making sure it best suits your circumstances," Clough says.

The median house price fell 2% in the quarter from $173,500 to $170,000 and average weekly wages continued aslow but steady rise. The Reserve Bank has cut its official cash rate, from which other interest rates are set, from 6.5% to 5.75% since the middle of March.

Affordability improved most in Manawatu/Wanganui, rising 20.3% in the quarter, followed by Southland, up 17.2%. Three of the top four regional improvements were in the South Island.

The smallest improvements were in Nelson, up 5.1% in the quarter, and in Wellington, up 5.9%. The biggest market, Auckland, showed a robust 13.5% quarterly improvement.

Annually, affordability declined in only two regions, Northland, down 6%, and Taranaki, down 4.1%. The largest annual improvement was in Otago, up 13.9%, followed by Canterbury/Westland, up 13.2%.

Percentage Change in Mortgage Affordability in the last quarter

Percentage Change in Mortgage Affordability
in the last 12 months
Region Improvement Decline Improvement Decline
Northland 12.4% - - 6.0%
Auckland 13.5% - 8.8% -
Waikato/Bay of Plenty/ Gisborne 12.9% - 6.8% -
Hawke's Bay 12.4% - 6.5% -
Manawatu/Wanganui 20.3% - 7.5% -
Taranaki 7.3% - - 4.1%
Wellington 5.9% - 1.9% -
Nelson 5.1% - 0.5% -
Canterbury/Westland 15.7% - 13.2% -
Otago 16.3% - 13.9% -
Southland 17.2% - 7.5% -
New Zealand 11.1% - 8.6% -
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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 7.24 ▼5.69 6.39 6.65
AMP Home Loans $200k+ 7.14 ▼5.59 6.29 6.55
AMP Home Loans LVR <80% - - ▲5.99 ▼6.19
ANZ 6.74 6.15 ▼6.39 6.49
ANZ Special - ▼5.69 ▼5.75 6.09
ASB Bank 6.75 6.09 6.40 6.65
ASB Bank Special - 5.70 ▼5.75 6.19
BankDirect 6.75 6.09 6.99 6.65
BankDirect Special - 5.70 ▼5.75 6.19
BNZ - Classic - - 5.75 ▼5.85
BNZ - GlobalPlus 6.74 5.89 6.39 6.59
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.89 6.39 6.59
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 6.05 6.20 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
Lender Flt 1yr 2yr 3yr
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.65 5.85 5.99 6.19
HBS Special - - - 5.89
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.70 6.00 6.50 -
Housing NZ Corp 6.74 5.99 6.39 6.59
HSBC Premier 6.84 5.95 5.95 6.39
HSBC Premier LVR > 80% - 5.75 5.75 5.75
HSBC Special - - - -
ICBC 6.75 5.99 6.39 -
Kiwibank 6.65 5.79 6.39 6.65
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.55 - - -
Kiwibank LVR > 80% - - 5.89 6.19
Liberty - - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
Resimac 6.59 6.35 6.58 6.77
SBS Bank 6.65 5.85 5.99 6.19
SBS Bank Special - - - 5.89
Lender Flt 1yr 2yr 3yr
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 6.09 6.40 6.65
Sovereign Special - 5.70 5.75 6.19
The Co-operative Bank 6.70 ▼5.70 ▼5.89 6.19
TSB Bank 6.74 5.95 6.19 6.30
TSB Special - - 5.79 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.59 - - -
Westpac Special - - ▼5.75 6.19
Median 6.70 6.00 6.39 6.52

Last updated: 24 October 2014 9:27am

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