Auckland (The NZ Today)
A new housing analysis has revealed a major gap between New Zealand’s most affordable and least affordable major cities, with Tauranga emerging as the toughest market for buyers while Wellington remains the most affordable among the country’s main centres.
The latest Cotality Housing Affordability Report found that housing affordability has moved closer to long-term averages after several years of pressure from high house prices and rising interest rates.
According to the report, falling property values, slower rent growth, rising incomes and lower mortgage rates have helped improve conditions for both buyers and renters.
Tauranga was identified as the least affordable major city for people looking to buy a home, while Wellington ranked as the most affordable.
However, the report noted that Tauranga’s affordability position is not as stretched compared with its own historical levels, with cities such as Christchurch, Hamilton and Dunedin showing greater pressure compared with their long-term averages.
One key measure showed the gap has narrowed significantly from the peak of the housing boom. The national value-to-income ratio has fallen to 6.7, matching its long-term average since 2004 and well below the record high of 9.8 reached in late 2021.
Meanwhile, for the first-home buyers, the report found the time needed to save a deposit has also eased slightly, with the average now around 8.9 years, compared with a long-term average of about nine years.
Mortgage affordability has also improved. Typical mortgage payments now account for around 40 percent of household income, down from a peak of 54 percent and slightly below the long-term average of 42 percent.
The rental market has also become less pressured, with median weekly rent taking about 25 percent of household income, returning close to historical levels.
However, housing experts warned that improved affordability does not necessarily mean homes have become cheap or that another property boom is about to begin.
The report suggests the current market may provide a more balanced starting point for buyers and renters after years of extreme housing pressure.
Source: Cotality Housing Affordability Report, as reported by OneRoof.
