Housing affordability for first-home buyers in New Zealand is becoming a bit of a lottery, with some regions improving in affordability and some getting worse.
Of the 12 regions monitored by the interest.co.nz Home Loan Affordability report, affordability improved in six regions: Northland, Manawatu-Wanganui, Wellington, Nelson-Marlborough, Otago and Southland.
Affordability worsened in Auckland, Waikato-Bay of Plenty, Hawkes Bay, Taranaki, Canterbury-Westland and Central Otago-Lakes.
The report tracked how much of their weekly after-tax pay a typical working couple aged 24 to 29 would have to set aside to meet the mortgage payments on homes bought at the Real Estate Institute of New Zealand's lower quartile selling price in each region.
It took into account the monthly regional movements in house prices and household incomes, and changes in mortgage interest rates.
Interest.co.nz spokesman Greg Ninness said a feature of the market over the past year had been falling mortgage interest rates.
The average two-year fixed rate offered by major banks had dropped from 5.98% in November last year to 4.81% last month.
"Unfortunately, the benefit of falling mortgage interest rates has been offset by rising housing prices in many areas.''
That was particularly true in Auckland, where the lower quartile selling price had increased from $548,300 in November last year to $614,700 last month, an increase of $66,400, or 12.1%, in 12 months, he said.
The increase would have pushed the weekly mortgage payments on a lower quartile priced home in Auckland from $750.24 a week in November last year to $757.60 a week last month, as the benefit of lower interest rates was more than wiped out by rising prices.
Over the same period, the median take-home pay for a "typical working couple'' in Auckland aged between 24 and 29 (the income bracket used in the affordability report) increased from $1509 a week to $1531 a week, a rise of just $22, or 1.5%.
Auckland remained the only region in the country where housing remained seriously unaffordable for first-home buyers, Mr Ninness said.
After Auckland, the next most expensive region for first-home buyers in November was Central Otago-Lakes.
There, the mortgage payments on a lower quartile-priced home would have taken up 28.2% of a typical first-home-buying couple's pay - well within the affordable limit.
In Wellington, the mortgage payments on a lower quartile-priced home would take up to 25.6% of a typical first-home-buying couple's income.
