Home affordability improving in Bay of Plenty | Bay of Plenty News | Local News in Bay of Plenty

Home affordability continues to improve in the Bay, giving prospective first-time buyers more hope of owning their own house.

The latest Home Affordability report from Massey University shows that Waikato/Bay of Plenty is now the seventh most affordable region in the country, after previously being one of the most expensive.

It was one of four regions experiencing an improvement in affordability, along with Central Otago Lakes, Northland and Southland, in the three months ending November.

Waikato/Bay of Plenty is 20.2 on the Home Affordability index, down from 21 for the quarter ending August.

With house prices increasing and a limited number of listings, Auckland has taken over as the least affordable region, rising from 26.7 to 28.3 in the November quarter. Central Otago Lakes slipped to second, from 30.5 to 27.4.

Nelson/Marlborough (22.3), Canterbury (21.4) and Wellington (20.8) are also ranked higher than Waikato/Bay of Plenty on the affordability index. Southland is the most affordable region on 12.7.

Professor Bob Hargreaves, executive officer of Massey University's School of Economics and Finance, said nationally the affordability index deteriorated by 1.9 per cent during the three months ending November, compared with an improvement of 0.8 per cent in the August quarter.

He said a 3 per cent increase in the national median house price more than offset a $6.21 rise in the average wage and a decrease in the average monthly mortgage interest rate from 6.21 per cent to 6.15 per cent.

"Very low mortgage interest rates combined with more relaxed lending criteria are combining to bring more buyers into the market, and new construction is still at a very low ebb," said Professor Hargreaves.

The median selling price in Tauranga for the November quarter remained steady - an average of $387,000 at Mount Maunganui and Papamoa, and $346,000 for the rest of the city. The average median for the country was $359,000.

Brian Berry, a director of Rothbury Financial Services in Tauranga, said the improvement in home affordability locally came on the back of lower purchase prices.

"I don't believe there's been any wage growth and interest rates are definitely lower. The combination means the market has been moving in the lower price range."

Mr Berry said banks were well funded and were being more aggressive with their lending policies because they recognise interest rates will stay low for a little bit longer. "Everything looks stable."

He said from October there was an increased demand for property purchases and pre-approvals.

"In early December it was like the old times with the volumes going through. There was a lift in activity through to the end of the year and it's come back now. But there's still a reasonable amount of activity and that's good."