Housing further out of reach of Kiwis - survey

By NZPA

Wednesday 22nd January 2003

The New Zealand dream of owning a home is getting harder to realise, with house prices rising and sales reaching record levels.

The AMP Home Affordability Index fell 3.3 percent in the December quarter, following falls in the previous four quarters of between 0.1 percent and 15 percent.

In the past 12 months national home affordability declined 24.4 percent, meaning homes were nearly 25 percent less affordable than a year ago, AMP Banking deputy managing director Michael Guggenheimer said.

That was despite stable interest rates, and a 2 percent rise in wage rates.

House sales for the past year were reported as 99,658, with the median dwelling price rising 5.4 percent to $195,000 over the December quarter.

"The fact that New Zealand has reached almost 100,000 residential sales per year shows the housing market is not only buoyant but sustainable," Mr Guggenheimer said.

"Domestic economic strength and continuing immigration means the high residential market activity is likely to continue through 2003."

Among the regions, nine of the 11 surveyed recorded a quarterly decline in home affordability, led by Southland (down 17 percent); followed by Otago (15.2 percent), Nelson/Marlborough (12.5 percent), Wellington (7.9 percent), Auckland (3.8 percent), Taranaki (2.6 percent), Hawke's Bay (1.7 percent), Canterbury/Westland (1.2 percent), and Waikato/Bay of Plenty/Gisborne (0.1 percent).

Home affordability improved in Northland (up 3.9 percent), and Manawatu/Wanganui (2.2 percent).

On an annual basis, houses were less affordable in all 11 regions, led by Nelson/Marlborough (down 29 percent) and Auckland (28.9 percent).

The Real Estate Institute said yesterday that house prices dipped slightly in the month of December, while ASB Bank's quarterly housing confidence survey published earlier today pointed to buoyant optimism and demand in the market.

The ASB survey revealed an increasing majority of people expect house prices to rise, but at the same time more people doubted that now is a good time to buy a house.

A fast-growing proportion of people expected interest rates to stay the same.

Residential property markets continued to benefit from a robust domestic economy, high levels of immigration, and job growth and high employment levels.

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