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Home affordability improves

Good news for property buyers comes in Massey University’s latest findings on home affordability which show there has been a slight improvement in affordability since June.

Tuesday, September 29th 2015, 12:46PM

by Miriam Bell

According to Massey’s University’s latest Home Affordability Report, annual deterioration in home affordability has slowed – and has recently improved.

Over the period from June 2015 to August 2015, home affordability nationwide improved by 2.3%.

Massey University senior property lecturer Dr Susan Flint-Hartle said this improvement has taken place in every region, apart from Nelson/Marlborough. 

“Even Auckland falls in line with this trend – affordability in our largest city has improved by 4.9% since our last report in June.”

Flint-Hartle said the change was due to a combination of falling mortgage rates, broadly static house prices, and modest wage improvements.

However, property buyers shouldn’t get too excited by the news.

The University’s national affordability index still shows a year-on-year decline of 6.7%.

In Auckland, affordability has decreased by 16.6% over the past 12 months and it remains 52% less affordable than the national average.

Additionally, the Reserve Bank recently said that Auckland’s house price-to-income ratio is now 9 – as compared to 4.5 around the rest of New Zealand. 

Flint-Hartle said that, while the report shows some improvement in affordability trends, the relative levels of affordability across the country haven’t really changed much.

“You must remember that these small improvements are coming off the back of historic levels of unaffordability.”

Since the data for the report was collected, the Reserve Bank has reduced the OCR further – to 2.75%.

Flint-Hartle said that reduces borrowing costs for home buyers and improves affordability in the short-term.

“But lower mortgage rates hold the potential to push up house prices in the longer-term, leading again to a deterioration in housing affordability.”

Massey University Home Affordability Report - Key findings:

• Quarterly improvement in national affordability: 2.3%

• Quarterly improvements in all regions except Nelson/Marlborough

• Quarterly improvement in Auckland affordability: 4.9%

• Annual deterioration in national affordability: 6.7%

• Most affordable region: Southland – 57% more affordable than the national average.

• Least affordable region: Auckland – 52% less affordable than the national average.

« Housing market losing “fizz”Values up but market changing »

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
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Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

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