An increase in building products by up to 15 per cent will make homes more unaffordable, especially for first-home buyers, a Northland builder says.
Bella Homes owner Simon Crawford said he had noticed price increases for a number of building items in the last three weeks, possibly due to demand.
His comments followed Massey University's latest Home Affordability Report that shows home affordability fell 32 per cent in Northland- the largest decrease throughout the country- between May 2016 and May 2017.
Read more: Home affordability down 10 per cent: report
The report shows house affordability fell across the country by nearly 10 per cent in the three months to May this year and by more than 15 per cent in most regions between May last year and May this year.
The three-month decline in Northland was 8.9 per cent while there was a yearly decrease of 32 per cent, followed by Hawke's Bay at 23.6 per cent and Nelson/Marlborough 23.3 per cent.
"The demand for houses and an increase in the price of building products of between three and 15 per cent is not helping as far as affordability of houses is concerned because these increases will get passed on to our customers," Mr Crawford said.
He said it was unlikely prices of building items would come down any time soon.
Professor of public health at Otago University, Philippa Howden-Chapman, said falling home affordability and rising rents in Northland would accelerate the movement of low-income families, mostly young Maori with children, from house to house.
She said buying a house would be a "mirage" for many Northland families, who fell into the low to average income bracket.
Professor Howden-Chapman said Aucklanders snapping up properties in Northland and a decline or stagnant income in the region contributed to rising house prices.
"What that report shows is that home ownership is getting further out of reach for low and average income families in Northland and families with children tend to be in that group.
"One of the effects of rising house prices and rents is people moving around a lot and that will increase and I don't think that degree of instability is good for children.
"The Maori population is younger on average than pakeha so a lot of young Maori families will continue to struggle for housing," she said.
Professor Howden-Chapman, an advocate for warmer and healthier housing, said the latest report showed it cost a third more to buy a house in Northland than it did one year ago.
Rents, she said, were going up as well.
The average rent in Whangarei in May last year was $319 a week but this had increased to $344 in May this year.
Home affordability is calculated by multiplying the median house price and mortgage interest rate divided by the average weekly wage.
The report comes on the back of a fall in Northland's median house price from $450,000 to $425,000 as well as a 43 per cent reduction in houses sold- from 315 in June last year to 237 in May this year.
The report's authors said the ratio of house prices to wages remained very high and that placed considerable strain on first home buyers.