New data suggests home affordability in New Zealand is at its best level in four years and will improve significantly over the coming year in what will be a boon for first-home buyers.
Financial information website interest.co.nz says the affordability increase is due to the slumping housing market and an unprecedented fall in fixed mortgage rates.
The website also says a reduction in tax rates has also helped lift disposable incomes.
Editor Bernard Hickey says the proportion of take-home pay needed to service a mortgage for a median home has dropped to 59.6%.
He says that is well below the worst level of 82.9% set in November 2007.
Mr Hickey says the coming year is likely to see further falls in house prices and interest rate drops, with the Reserve Bank expected to cut the Official Cash Rate next week. The rate is currently 5%.
He says the proportion of after-tax pay used to service a mortgage needs to be about 40% to be considered affordable - meaning homes remain out of reach for most people.