Tauranga homes more affordable

Tauranga housing is becoming more affordable, despite more buyers getting back into the market, a local property valuer says.

National housing affordability improved slightly last month, the Roost home-loan affordability report has revealed.

The report measured the percentage of after-tax pay needed to service an 80 per cent mortgage on a median-priced house.

Tauranga home-loan affordability improved from 54.5 per cent in June this year to 49.7 per cent in July, compared with 57.8 per cent a year ago.

TelferYoung property valuer Paul Thomas said Tauranga house prices had remained stagnant for a while, despite increased activity: "There seems to be lots of people looking to do things, but at the moment that hasn't changed the value."

New restrictions on high-risk home loans didn't appear to have sparked buyers into action before the October 1 deadline.

But Tauranga buyers were becoming more optimistic.

"People are a bit more confident ... and prepared to get back into the market again."

This had not translated into higher house prices yet, he said.

REINZ figures show the median house price in Tauranga is $315,000.

Tauranga's average weekly pay cheque after tax for people aged 30-34 is $735.33 - up from $720.50 in July last year.

Nationally, housing affordability improved from 56.7 per cent in June to 55.3 per cent in July.

The median weekly pay packet for the 30-34 age bracket is $807.79, up from $793.85 a year ago.

Auckland was the toughest location for first-home buyers, where it would take 89.9 per cent of an after tax income to afford a house in South Auckland, and 101.7 per cent on the North Shore.

The cheapest place to buy a house was Wanganui, with 31.5 per cent affordability.

The national median house price fell to $385,000 last month [July] from $394,000, as banks began tightening lending criteria to comply with the Reserve Bank's new "speed limit" lending restrictions.

The announcement restricts the amount of low deposit home loans banks can issue to borrowers.

The measures do not come into force until October 1, but banks have already begun offering low interest rates to borrowers with deposits of more than 20 per cent and imposing "low equity premiums" on those with lower deposits, the Roost report said. Lending criteria was also being tightened for people with bad credit ratings.

Colleen Dennehy, of Roost Mortgage Brokers, said borrowers with more equity were now in a much stronger position to negotiate better deals.