Nationally, home affordability has reflected flat or falling house prices in most of the 37 areas scrutinised, in combination with the decline in floating mortgage rates prompted by the Christchurch earthquake, according to the Roost Home Loan Affordability report for February, released yesterday.
Roost spokeswoman Rhonda Maxwell said "Affordability for young couples is now at levels not seen since the middle of last decade, which is encouraging many to look at buying their first homes".
The national median house price rose 2.9% to $350,000 during February, from $340,000 in January.
Affordability is based on buyers having a 20% deposit and the percentage of after-tax income spent on repaying a mortgage.
Payments of more than 40% are considered unaffordable.
While prices outside central Auckland and Wellington are flat to falling, in Queenstown the median price rose 17.4% from the month before to $569,500.
Managing editor for interest.co.nz, Bernard Hickey, said most home owners were still on fixed mortgages, but more new borrowers were choosing to float, given floating rates around 5.75% are cheaper than the longer-term fixed rates at around 6.2%.
"However, there are renewed signs of a two-speed housing market, where prices of more expensive homes in Auckland are firmer than entry level and investment properties in the outer suburbs, and in provincial cities, where prices are weaker and buyers are in a stronger position," Mr Hickey said in a statement yesterday.
The affordability reports are now using the floating rate, as most new mortgages are now floating, rather than fixed.
Mr Hickey said affordability for households with more than one income improved in January, because of the fall in the median house price.
However, affordability was difficult in Queenstown, Auckland, Wellington, Christchurch, Hamilton and Tauranga for those on a single median income, but home buyers in smaller provincial cities would find home ownership much more affordable, he said.
Home affordability in Otago for February
National median $350,000
Otago median price down 14.6% to $235,500
Dunedin median price down 10% $245,000
Central Otago Lakes median price up 8.3% to $436,000
Queenstown median price up 17.4% to $569,500
