Homes less affordable, but still within budget

Wanganui City PHOTO/FILE

Housing affordability has worsened slightly in Wanganui, but it's still the country's most affordable city in which to buy a home.

National housing affordability improved slightly last month, according to the latest Roost home loan affordability report which measures the percentage of after-tax pay needed to service an 80 per cent mortgage on a median-priced house.

Despite being the nation's most affordable city, home loan affordability in Wanganui worsened from 28.3 per cent of your take-home pay in June to 31.5 per cent in July. That compares with just 27.3 per cent of pay needed for a mortgage a year ago.

Property Brokers in Wanganui branch manager Philip Kubiak said the important point was that affordability was still there in the city. "Alongside other economic factors like jobs, it should be a big drawcard for a lot of out-of-towners who want to move here."

The property market was still seeing a "bit of a flurry" after a Reserve Bank announcement to restrict high-risk home loans, he said.

"We've had offers coming in from people who had been in the market for some time and now there's a little bit more urgency to get things nailed before the deadline of October 1."

Figures showing Wanganui houses were becoming less affordable could have been skewed by some high-value sales, he said. "You've got to be careful of that factor."

According to the latest REINZ figures, the median house price in Wanganui is $185,000.

Wanganui's average weekly pay cheque after tax for people aged 30-34 is $699.72 - up from $685.63 in July last year.

Nationally, housing affordability improved from 56.7 per cent in June to 55.3 per cent in July. 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 median national pay packet for the 30-34 age bracket is $807.79 a week, up from $793.85 a year ago.

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

The announcement restricts the amount of low deposit home loans banks can issue to borrowers. The measures don't come into force until October 1.