Region's home prices up as affordability worsens

Average annual wages have risen by $845 in the past year but local house prices soared by $16,500, according to a new survey.

The gross Waikato/Bay of Plenty average weekly wage for May was $1005.94, compared to $989.69 a year earlier, Massey University's Home Affordability Report reveals.

The median house price rose from $319,500 to $336,000 over the same period, with Waikato/Bay of Plenty home affordability declining by 4.8 per cent.

Nationwide, average wages rose by $1795, or $34.53 a week, and house prices jumped $38,000 in the past year, with home affordability deteriorating by 7.6 per cent.

Home affordability is shaping up as a key election battleground with both major parties bickering over how to tackle the country's spiralling housing costs.

Meanwhile, new dwelling consents rose slightly in Rotorua from five to seven from May last year to May this year.

Nationwide trends show consents are at their highest level since 2007, despite flattening in recent months, according to Statistics New Zealand.

The Mortgage Centre Rotorua owner Graeme Leigh said Rotorua was a lot more affordable than the wider Bay of Plenty region, with the May median price as set by the Real Estate Institute sitting at $242,500.

If a borrower provided a 20 per cent deposit, their loan would be $194,000, which could work out at weekly repayments of $283.

It was comparable to some weekly rental prices, he said.

Massey's analysis showed a national deterioration in home affordability in the past year and a rising gap between house prices in larger urban centres and provincial areas.

Registered Master Builders Association chief executive Warwick Quinn said he expected 23,000 to 24,000 residential building consents to be issued this year, up from 21,300 last year. additional reporting Ann Gibson