New Zealand houses are at their least affordable in 18 years, and are at a level last seen when interest rates were as high as 15.5 per cent, according to a Massey University survey.
Home affordability fell by 5.1 per cent over the three months ended November, toits lowest level since 1989 when the survey began, said Bob Hargreaves, director of Massey University's Property Foundation.
Home affordability has declined each quarter over the last four-and-a-half years, Prof Hargreaves said.
The latest fall was due to a rise in national median house prices - up 6.4 per cent - outstripping the average weekly wage rise of 1.5 per cent.
Mortgage interest rates were a touch higher, up 0.03 per cent.
On an annual basis, home affordability fell by 7.3 per cent, as a 10 per cent rise in house prices beat a 6 per cent increase in the average weekly wage, Prof Hargreaves said.
The weighted average interest rates on home loans rose 3.4 per cent for the year.
The largest declines in affordability over the quarter were in Otago (down 10.9 per cent), Wellington ( down 9.4 per cent), and Taranaki (down 8.9 per cent).
Central Otago Lakes was the only area to improve in profitability, up 14.7 per cent, although it remained the least affordable region.
Government agency Quotable Value said yesterday residential property prices grew 9.2 per cent over 2006, compared with the year before.
The average sale price for a property rose to $348,886, QV said.
The December quarter rise was consistent with annual growth for the three months to November (9.4 per cent) and October (9.6 per cent).
Growth peaked at 16.8 per cent in January 2006, but has slowed every month since.
