The largest improvement in New Zealand home affordability in a decade is attracting more first home buyers, although the high deposit rates required by banks remains a hurdle, according to a survey today.
Home affordability improved by 8.5 percent between February and May, and by 17.7 percent over the year to May, the quarterly Massey University Home Affordability report showed.
The quarterly jump continued the improvement in affordability since early 2008, based largely on current low mortgage rates. The report also took into account house prices and average weekly wages.
“Anecdotal evidence, based on recent increases in house sales volume, suggests more first time home buyers are now entering the market and taking advantage of improved affordability,” report authors Bob Hargreaves and Fong Mee Chin said.
“However, some potential first home buyers are being shut out of the market while they save for the larger deposit (20 percent) now required by most lenders.”
Central Otago Lakes remained the least affordable region, followed by Auckland and Nelson/Marlborough, while Southland remained the most affordable, followed by Manawatu/Wanganui and Otago.
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Source findata.co.nz