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The southern South Island has the extremes of home ownership affordability, with Queenstown the most difficult place in the country to service a mortgage and Southland the least.
Thanks to declining house prices, record low mortgage interest rates and wages and salaries slowly increasing, home loan affordability last month was the best it had been since April 2004, the Roost Home Loan affordability report for May showed.
The report calculates how much of a single median take-home income is required to service an 80% mortgage on a median-valued home.
Roost considers a mortgage unaffordable if servicing it requires 40% or more of one person's median weekly take-home wage.
In Queenstown, the affordability index was 79.3% - by far the highest in the country. The median house price was $500,000 and the median weekly take-home pay for a typical buyer (aged 30-34) was $730.78.
Auckland's North Shore had the second highest percentage at 70.3%. The median house price there last month was $542,800 and the median weekly take-home wage $894.15.
Servicing a mortgage in Queenstown has become significantly more affordable in recent years, the report showed. A year ago it would have taken 111% of the median wage, with 120.1% required five years ago. The index reached its highest point of 154.3% in December 2005.
It took just 28% of one median wage to service a mortgage in Southland last month, the index showed. That was about half the 58.8% required at the peak of the housing market in January 2008.
The median house price in Southland last month was $180,500 and the median weekly take-home wage $747.40.
Affordability was 42.6% in Dunedin, down from 50.6% a year ago. Mortgages were least affordable in March 2008, when the index reached a peak of 71.8%.
The median house price in Dunedin last month was $250,000 and the median weekly take-home wage $680.
Affordability improved in most cities and provincial areas, including Auckland Central, Wellington, Hamilton and New Plymouth, because of a drop in median house prices, the report showed.
Affordability worsened marginally around Christchurch and Timaru as median prices rose amid demand for houses not damaged by the earthquake.
Banks were increasingly keen to win new business and keep existing customers, Roost Home Loans spokeswoman Rhonda Maxwell said.
"Banks are offering loan to value ratios of up to 90 and 95% and are discounting establishment and legal fees in competitive situations."