Aucklanders may be able to afford homes in Otago but they will have to be prepared to take a wage cut, the latest Home Affordability Report shows.
The Massey University report showed there had been a modest improvement in the affordability of housing in most regions in the three months ended December.
Auckland was 59% less affordable than the rest of the country, a slight improvement from September.
A campaign was launched recently trying to attract Aucklanders to the South.
A fall in affordability was recorded in Wellington (3.3%) and Manawatu-Wanganui (2%) but the winners in the affordability race were Central Otago-Lakes (10.7% rise) and Nelson-Marlborough (7% rise).
Report author Susan Flint-Hartle told the Otago Daily Times Otago was in an "interesting position''.
Affordability in Otago had deteriorated by 9.5% in the three months ended December as wage levels had dropped by about 11% in the period and 8% in the past year.
The opposite applied in Central Otago-Lakes, where wage levels had increased by more than 12% in the quarter and 13% in the past year, she said.
The affordability report used house prices, interest rates and wage levels to compile its results.
The wage data had come from the Reserve Bank and there appeared to be no apparent major reason for the drop in wage levels, Dr Flint-Hartle said.
One reason might be the rise in tourism numbers and operators having to pay higher wages to attract and keep staff in Central Otago-Lakes, and a transient student population in Dunedin taking lower-paid jobs.
Otago-Southland Employers Association chief executive John Scandrett was also perplexed about the apparent drop in wage levels.
"Within the mix, I'm not so sure about the reported slump in Otago wage rates - pretty steady as it goes on that front, I would have thought. But we do have only 23.1% of the Otago population over 15 years earning $50,000 per annum or more, and this is behind the NZ figure of 26.7%, and that may have a bearing on affordability.''
In Otago, the results of a lifting property market, driven by an increase in newcomers to the region, were starting to be seen, he said.
Recent statistics supported the inward lift in population and real estate people were saying they were seeing most property transactions having two or more contracts on them.
More competition and less affordability was evident in what was previously a sluggish market situation, Mr Scandrett said.
Dr Flint-Hartle said the messages were mixed when it came to understanding whether there was a sustainable trend towards more affordable housing in Auckland and the rest of New Zealand.
Recent reduction in borrowing costs and positive sentiment about a two-year hiatus in interest rates held the potential to keep pushing house prices higher.
"So, on balance, we feel there is a very real possibility of deterioration in housing affordability once again in the early part of next year.''
Key points
• Annual improvements in national affordability of 8.7%
• Quarterly improvement in national affordability of 5.7%
• Significant quarterly improvement in Central Otago-Lakes
• Deterioration in Otago affordability due to falling wage levels
