HomepropertyNewsHome Loan Affordability report from interest.co.nz
Home Loan Affordability report from interest.co.nz
16 February 2009, 12am
When you're logged in as a Tauranga.co.nz Member, you can save pages to 'My Favourites', a facility to remember the stuff the most interests you. If you're already a member, enter your username and password in the Member's Login to the left.
Not a Member? Why not?
Click here to see all the features
and benefits of becoming a Tauranga.co.nz Member today!
for IMMEDIATE release
Record improvement in housing affordability in January Housing seen affordable again by the end of 2009
Housing affordability improved a record amount to its best levels in 5 years in January because of further falls in house prices and a sharp reduction in mortgage interest costs, a monthly survey by interest.co.nz has found.
After years of housing being unaffordable for most New Zealanders, interest.co.nz is now forecasting that housing will be affordable again for most New Zealanders by the end of 2009 if the current trend of improvement continues.
“All of the trends are converging to make housing much more affordable for both families and single income home buyers. House prices are sliding, interest rates have fallen fast, taxes are set to be cut again and incomes are rising, even if much more slowly. These have all combined to reduce the proportion of after tax income needed to service the mortgage on a median home,” said interest.co.nz editor Bernard Hickey.
“The one big silver lining of the credit crunch is this rapid improvement in housing affordability,” Hickey said.
The standard measure of affordability nationally showed the proportion of a median after tax pay needed to service an 80% mortgage on a median house fell to 54.1% in January from 59.8% in December, which was a record improvement for any one month since the survey data started in January 2002. This is sharply better than the 82.9% record worst level recorded in November 2007 when house prices peaked. This was the best level since April 2004. Interest.co.nz sees this measure being affordable for most when it dips below 40%.
The first-home-buyer measure improved to 46.8% from 52.4% last month and is well below the November 2007 peak of 73.8%. It is at the best levels since November 2004. This measure uses the median income for a 25-29 year old buying the first quartile home. Interest.co.nz sees this as affordable when it dips below 40%.
