First-home buyers around the country are already becoming better off with the decline of banks' mortgage interest rates, as home affordability comes a step closer.
However, while there are gains for many, in being more than $30 a week better off, rising house prices have more than negated that gain for some southern buyers around the Central Otago Lakes area and Southland, according to interest.co.nz home loan affordability report.
Affordability is based on a couple buying into the lower quartile of their housing market; affordable being mortgage repayments below 40% of the couple's take home pay, and above 40%, unaffordable.
While all new home buyers would benefit from declining mortgage rates - nationally $31.56 per week, in Wellington by $47.56 and Auckland by $26.87 - many areas remain unaffordable.
Queenstown affordability improved, but stood at 44.3% of a couple's take home pay, while central Auckland, North Shore, Manukau and Waitakere were all bound in a range of 50.4% to 58.4%. Dunedin affordability improved, to 18.8%.
''The biggest driver of the improvement in affordability last month was the change in the average mortgage interest rate, which fell by 0.3% to 5.31% in June, compared to 5.61% in May,'' the report said.
It was the lowest average two year fixed mortgage interest rate since data was first collated in January 2002.
However, four regions where affordability for first home buyers worsened in June - Manawatu Wanganui, Taranaki, Central Otago Lakes and Southland - all posted substantial increases in their lower quartile house selling prices, ''which more than wiped out the benefits of the fall in mortgage interest rates'', the report said.
While the improvement in first home affordability was welcome in the eight regions in which it occurred, the report said housing remains ''seriously unaffordable'' for first home buyers in Auckland.
At a glance
First home buyers better off: Otago, Northland, Auckland, Waikato Bay of Plenty, Hawkes Bay, Wellington, Nelson Marlborough, Canterbury Westland.
First home buyers worse off: Central Otago Lakes, Southland, Manawatu Wanganui, Taranaki.-
Source: interest.co.nz
