Home affordability has taken a dive in Northland, bucking a national trend of lower house prices and kinder interest rates helping first-time buyers to get a roof of their own.
But the situation is not as bad as it was at the height of the property boom, a new report shows.
The
latest Roost Home Loan Affordability report shows the average Northlander now needs to spend 57.8 per cent of their take-home pay just to pay off the mortgage, assuming they have a 20 per cent deposit. Anything above 40 per cent of take-home pay is classed as unaffordable.
That figure, based on last month's wage and house price data, is worse than the previous month's figure of 53.7 per cent - and runs counter to the national trend, which saw a sharp improvement in affordability last month.
Interest.co.nz editor Bernard Hickey said the surprising result for Northland was due to a jump in the median house price from $280,000 to $307,000 between June and July.
However, that could be a "skew" caused by mostly expensive homes changing hands last month while cheaper properties remained unsold.
The latest home affordability figure for Northland is roughly back to where it was five years ago (57.4 per cent of take-home pay) and is vastly better than it was when the housing market hit is peak in April 2008.
At that time, the average Northlander needed to spend almost 93 per cent of his or her pay just to pay off the mortgage on an average house.
The picture is also much rosier for a typical household, which is taken to be one median male income, half a female median income and a 5-year-old child, receiving a Working for Families benefit.
The median household now needs need to spend 38 per cent of their combined income to pay off the mortgage, up slightly on last month but still affordable.
Northland is in the middle of the pack when it comes to home affordability around New Zealand. The most affordable homes are in Southland; the least by a long way are in Central Otago Lakes and Auckland.
