Home affordability improves

Homes became more affordable in the three months to August 31, as interest rates, wages and house prices remained subdued, Massey University's latest Home Affordability Report shows.

The national affordability index improved by 0.8 per cent during the period, equating to a 9.7 per cent increase in the year to date, but down on the 11.1 per cent recorded in the three months to May 31.

Professor Bob Hargreaves of the university's school of economics and finance said the housing market was characterised by low turnover, an expectation that mortgage interest rates will not increase much in the short-term and continuing low wage growth.

The average weekly wage rate increased by $6.15 over the quarter, the median house price remained static at $350,000 and there was a 0.01 per cent decrease in the average monthly mortgage interest rate to 6.59 per cent, he said.

Northland (6.4 per cent) Taranaki (3.9 per cent), Southland (3.3 per cent), Otago (2.5 per cent), Hawkes Bay (2.3 per cent), Auckland (1.7 per cent) and Nelson/Marlborough (1.3 per cent) all showed an improvement in affordability during the quarter.

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Posted: 1 Oct 2010

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