House prices still too high for many

By John Maslin


Home affordability in Wanganui continues to be a struggle for families and those on single incomes.

The latest Roost home loan affordability report shows owning a home in Wanganui in August cost, on average, 29.2 per cent of an individual's median weekly take-home pay to meet repayments on a 25-year mortgage for an average home in the city.

The average house price was $175,000 in August, while the median weekly take-home pay for a typical buyer was $693, and weekly mortgage payments (on a floating rate of 5.73 per cent) were $202.

The good news for buyers is that the situation is likely to be improved with the September sales figures from the Real Estate Institute of NZ showing the average house price in the Wanganui district had dropped even further.

REINZ said the median price for homes selling in the city had slipped a further $12,500 to $162,500. That is the identical median sales figure in Wanganui in August last year.

Based on the August figures, however, Roost said the median income for the typical buyer was not high enough to buy a median priced house, even with a 20 per cent deposit.

"This measure shows the typical buyer's income is just too low by itself to afford the mortgage payments on the median-priced home," Roost said.

Affordability worsened across the country as average house prices rose to $370,000 in August from $361,000 in July. Single, after-tax income needed to service an 80 per cent mortgage on a median house was 53.5 per cent in August.

Home purchase becomes affordable for first home buyers if both adults are working. That assumes one person working fulltime, one part-time and they are also receiving working for families benefits.

Roost said it took 11.2 per cent of the median take-home pay of typical first-home buyer to service a mortgage for a house in the lower price range - a minor lift from July.

- Wanganui Chronicle

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