Housing affordability has improved for first home buyers in Dunedin and Queenstown but has become harder for those living in the rest of the South Island.
The interest.co.nz Home Loan Affordability series, released yesterday, indicated Dunedin was the only South Island centre to show an annual fall in first quartile house prices in July from July last year.
The price fell 2.2% to $214,000 from $218,722. In the Queenstown Lakes district, the first quartile price rose 1.9% to $476,250 and in Invercargill, it rose 9.3% to $155.438.
Timaru rose 4.8% to $260,000, Christchurch rose 5.3% to $366,400 and Nelson was up 6.1% to $327,000.
Graphs included in the series showed Southland was by far the most affordable region in which to buy a first house where about 11% of household income was needed to service a mortgage.
Otago was the third most affordable region as home owners needed 18% of their household income for their mortgage. Central Otago Lakes remained one of the least affordable areas where about 35% of income was needed for a mortgage, behind Auckland on 50%.
However, when the percentage of take home pay needed as a mortgage payment was compared, Central Otago Lakes first home buyers needed more than 70% to pay their mortgage. In Auckland, more than 100% of take home income was needed.
Southland remained the most affordable where about 25% of take home income was needed and Otago was equal with Taranaki with 38%.
It takes $476.32 a week to service a mortgage payment on a lower quartile priced property in Central Otago Lakes, down from $496.19 in May and $459.46 in July last year.
In Otago, it takes $219 a week to service a mortgage on a lower quartile property, down from $226.97 in May, and in Invercargill, the payment has risen to $166.88 from $159.56 in May.
Interest.co.nz said in a media release lower quartile priced housing remains affordable for typical first home buyers in all parts of the country except Auckland, where high prices were putting it out of reach for buyers on average incomes.
Figures released by the Government showed there had been 89 HomeStart applications approved in Dunedin since Government support for making a deposit on a house doubled in April. So far, 75 applications had been paid out.
Immigration Minister and Dunedin based list MP Michael Woodhouse said he would encourage all first home buyers in Dunedin to check whether they were eligible. Over the next five years, HomeStart was expected to help 90,000 people into home ownership.
The HomeStart package came into effect on April 1, replacing the KiwiSaver first home deposit subsidy. First home buyers could apply for grants of up to $10,000 to buy an existing home and grants of up to $20,000 for a new build.
