27 Mar 2009

Survey shows housing affordability improving

7:10 am on 27 March 2009

Quarterly survey results suggest housing affordability has improved by more than 8% since November last year.

The Massey University home affordability index has dropped by almost three index points to just under 30. The survey aggregates average weekly earnings, house prices and interest rates. The lower the index, the more affordable the housing.

Professor Bob Hargreaves compiled the report and says the improvement is due to a decrease in mortgage rates and house prices, combined with a slight increase in the average weekly wage.

He says almost all regions experienced an improvement in affordability, with the exception of Southland, and the situation is likely to continue to improve over the next few months.

However, although it is becoming easier to service a home loan, it is now more difficult for first-home buyers to get a mortgage because of stricter bank rules, he says.