Houses more affordable - but it may not last
By Isaac Davison
4:00 AM Friday Jan 8, 2010

More affordable homes are driving enthusiasm in property sales, but experts warn the relatively cheaper housing may not last.

In a Herald-Nielsen survey of 2300 people, 66 per cent of respondents felt this summer would be a good time to buy or sell a house.

This came as a major real estate firm reported improving sales, and research was released showing housing continued to become more affordable in the three months to November.

A Massey University study showed affordability had improved by 20.3 per cent over the last year, and by 2.6 per cent in the last quarter.

Professor Bob Hargreaves, who compiled the report, said low interest rates were behind the improvement.

But he said the more hawkish statement issued by the Reserve Bank made it less likely low interest rates would be sustainable through the year.

"Interest rates for 2010 are more likely to go up, and house prices will rise too. Although we've had this improvement up to November 2009, things may not be so good in 2010."

More here.