[ExPat]

For those that care about housing and a little security....

Monday May 21, 09:26 AM
NZ home affordability feels the squeeze

There has been a dramatic squeeze in home affordability measures in New Zealand in the last three months, effectively shutting out most first-home buyers, according to a survey released at the weekend.

The Interest rates in New Zealand home loan affordability survey found that in April an average household needed two average incomes to afford a standard mortgage for a median-priced house.

This is the first time ever that the level of two full incomes has been breached.

Lenders assess total household income when approving a mortgage, rather than relying on just one income.

To achieve a situation where 40 per cent of total household income was used to pay the mortgage, 2.0 average incomes in a household are now needed, up from 1.9 in March 2007, 1.7 in April 2006, and 1.2 in April 2002.

In many parts of New Zealand it is now impossible to buy an average house on one average income.

The least affordable regions are Central Otago Lakes, Auckland and Northland and the most affordable regions are Southland, Otago and Manawatu/Wanganui.

In the last three months people needed 8.6 per cent more income to avoid being worse off with respect to mortgage affordability. In the past 12 months they needed 16.3 per cent more income.