11 Oct 2017

Nationwide housing affordability improves

4:14 pm on 11 October 2017

As house prices have fallen, housing affordability has improved in more than half of the country's regions in the last three months.

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Photo: RNZ

The latest Massey University Home Affordability Report looks at house prices, the cost of borrowing, and wages.

The report shows housing affordability has slightly improved nationwide, largely driven by falling prices in Northland, Wellington and Central Otago Lakes. In Northland median house prices dropped $30,000, in Wellington by $28,000, and Central Otago Lakes by $35,000.

Central Otago Lakes is still the least affordable region in the country.

Auckland is the second least affordable, but overall affordability in the city has improved slightly in the last quarter.

It is one of the seven regions across the country, out of 13, which have seen improvements in the latest report.

Associate Professor Graham Squires from the School of Economics and Finance said borrowing costs have remained relatively low and wages static, so house prices continue to be the key determining factor in home affordability.

"We've seen some significant falls in house prices in some regions this quarter, so it will be interesting to see if this spreads to other regions in the coming quarter."

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