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Home affordability falls in September quarter

National home affordability fell in the September quarter, thanks to rising house prices swamping the benefits of rising wages and falling mortgage interest rates.

Thursday, November 1st 2001, 5:43PM

by Jenny Ruth

AMP Banking’s home affordability survey conducted by Massey University showed the latest decline followed improvements in home affordability in each of the previous three quarters.

AMP expects home affordability will improve again in the current quarter, thanks to further declines in mortgage rates.

Its index, which combines data on housing prices, mortgage interest rates and average weekly earnings, showed a 2.1% decline in the September quarter. But for the year ended September, homes were 11.7% more affordable.

"It is a good time for first home buyers to consider purchasing and reviewing the wide range of loan options currently available," says Noel Kirkwood, AMP Banking operations manager.

The September decline was thanks to a 3.5% rise in the national median house price which offset a 1.3% increase in average weekly wages and the decline in mortgage rates.

The Reserve Bank cut its official cash rate, from which other interest rates are set, from 5.75% to 5.25% on 19 September. Most economists are forecasting a further 50 basis point cut when the central bank issues its next monetary policy statement on 14 November.

But although national affordability fell, six of the 11 regions the AMP survey measures saw an improvement and Auckland’s remained unchanged in the quarter.

The four regions which dragged the index down were Southland, where affordability fell 24.5%, Otago, down 8.1%, Waikato/Bay of Plenty/Gisborne, down 4.5% and Manawatu/Wanganui, down 4.2%.

Compared with a year ago, all regions expect Southland, which experience a 12.7% decline, saw an improvement in home affordability. Nevertheless, Southland remains the cheapest region for homes in New Zealand with the median price only 54.5% of the national average.

The biggest improvement in home affordability in the September quarter was in Taranaki, up 8.5% and the median price of Taranaki houses is only slightly more expensive at 56.7% of the national average.

Compared to a year ago, Hawkes Bay homes saw the biggest improvement in affordability, up 19.4%, and the median price there is 76.9% of the national average.

Auckland houses remain the most expensive with the median prices at 128.8% of the national average, but affordability in Auckland improved 13.7% from a year ago.

« New housing consents fell in SeptemberFalling rates encouraging more borrowing »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 6.99 5.99 6.29 6.60
AMP Home Loans $200k+ 6.89 5.89 6.19 6.50
AMP Home Loans LVR <80% - - 5.85 6.29
ANZ ▲6.74 6.05 6.49 6.65
ANZ LVR > 90 ▲6.74 6.55 6.99 7.15
ANZ Special - - 6.09 -
ASB Bank 6.50 6.09 6.40 6.65
ASB Bank Special - 5.95 - -
BankDirect 6.50 6.09 6.99 6.65
BankDirect Special - 5.95 - -
BNZ - Classic - - - 6.25
Lender Flt 1yr 2yr 3yr
BNZ - GlobalPlus 6.49 5.99 6.39 6.59
BNZ - Mortgage One 6.90 - - -
BNZ - Rapid Repay 6.49 - - -
BNZ - Std, FlyBuys 6.49 5.99 6.39 6.59
BNZ - TotalMoney 6.49 - - -
Credit Union Auckland ▲6.70 - - -
Credit Union Baywide 6.10 5.90 6.50 -
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
Lender Flt 1yr 2yr 3yr
First Credit Union 6.45 - - -
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.15 5.85 6.20 6.25
HBS Special - - - 5.95
Heartland 6.45 6.75 7.00 7.60
Heretaunga Building Society 6.25 5.85 6.50 -
Housing NZ Corp ▲6.50 ▲6.00 6.30 ▲6.60
HSBC Premier 6.59 5.95 5.99 6.25
HSBC Premier LVR > 80% - - - -
HSBC Special - 5.85 5.85 5.85
Kiwibank 6.40 5.99 6.29 6.29
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.30 - - -
Kiwibank LVR > 80% - - 5.85 6.29
Liberty 5.64 - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.75 5.95 6.60 -
NZ Home Loans 6.35 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
RESIMAC - lo doc 7.34 7.06 7.38 7.82
RESIMAC LVR < 80% 6.34 6.06 6.38 6.82
RESIMAC LVR < 85% 7.34 7.06 7.38 7.82
Lender Flt 1yr 2yr 3yr
RESIMAC LVR < 90% 8.34 8.06 8.38 8.82
SBS Bank 6.15 5.85 6.20 6.25
SBS Bank Special - - - 5.95
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.60 6.09 6.40 6.65
Sovereign Special - 5.95 - -
The Co-operative Bank 6.45 6.00 6.00 6.25
TSB Bank 6.49 6.00 6.19 6.60
TSB Special - - 5.80 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac 6.24 6.09 6.39 6.65
Lender Flt 1yr 2yr 3yr
Westpac - Capped rates - 6.49 6.99 -
Westpac - Offset 6.24 - - -
Westpac Special - 5.95 - -
Median 6.45 6.00 6.39 6.60

Last updated: 24 July 2014 10:31am

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