Small declines in both house prices and mortgage interest rates during November made home ownership the most affordable it has been for first home buyers since October 2021.
According to the Real Estate Institute of New Zealand, the national median selling price declined from $607,500 in October to $599,000 in November.
That puts it just below where it was in November last year, $600,000, but still well below its November 2021 peak of $670,000.
At the same time the average of the two year fixed mortgage rates has continued to decline, down to 5.63% in November from 5.68% in October and 7.04% in November last year.
The average two year fixed rate is now at its lowest point since September 2022.
Slow but steady increases in income are also helping.
Interest.co.nz estimates the median take home pay for working couples aged 25-29 has been increasing by about $3 a month since the beginning of the year.
While none of the above would have made a significant impact on housing affordability levels on their own, when taken together they have made home ownership the most affordable it has been for typical first home buyers since October 2021.
Unfortunately an improvement in affordability is not the same as being affordable.
On average, first home buyers would still need to find more than $100,000 for a 20% deposit on a home at the national lower quartile selling price, and in Auckland they would need $161,200.
If they went for a low equity mortgage with a 10% deposit, the repayments would likely be so high they would push home ownership out of reach for typical first home buyers in higher priced regions such as Auckland and the Bay of Plenty.
So although affordability has improved for first home buyers, major challenges remain.
The tables below show the main affordability measures for typical first home buyers with either a 10% or 20% deposit, in all major urban areas of Aotearoa.
11 Comments
Just like when interest rates were the lowest they ever were people bitching and saying "don't fix for 5 years, there going negative"
Now its the best time to buy in years and interest rates dropping and people still bitching...
The people that do do and the people the whine get no where..
Merry Ho Ho :)
Mad isn't it.
“They act as if a low rate is a panacea and comes with no downside. That is clearly nonsense. It’s created the biggest evil in our society and that is inequality.”
- Legendary investor Jeremy Grantham on how the sheeple and Ponzi promoters think and the actual reality - low interest rates working with non-GDP qualifying credit creation to drive up asset prices
It is possible to have both more affordable house prices in real terms, and lower interest rates.
You mean like Japan and China? For sure this is possible. But you also have to face the consequences. I'm not sure Aotearoans are mentally, emotionally, and financially equipped to go what Japan has faced and what China is dealing with.
This is just a garbage pep talk to throw useful idiots into the ponzi so their leveraged investment is protected.
Imagine this attitude with trading or building a business.
You’re faced with a critical decision that could make or break you financially for the rest of your life, odds are no better than the spin of a roulette wheel and your approach is….
tHosE thAT Do, Do! Aaaannd, it’s gone.
How about those that calculate, win?
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.