\u201cHousing certainly isn\u2019t cheap, but for those trying to buy their first home or upgrade, we\u2019re currently seeing a level of affordability that is much closer to the country\u2019s historic norms,\u201d Davidson said.<\/p>\n
Notably, mortgage servicing costs have improved, with repayments accounting for 42% of gross median household income, down from a peak of 56% in late 2023.<\/p>\n
\u201cServicing a relatively new mortgage is also back to around its normal levels and is much improved from the situation a few years ago,\u201d Davidson said.<\/p>\n
\u201cIn the current lower-interest-rate environment, it may not be the significant handbrake on medium-term house price growth that it was a few years ago.\u201d<\/p>\n
However, saving for a deposit remains a significant barrier to entering the housing market.<\/p>\n
The years required to save a 20% deposit fell from 13.4 during the post-Covid housing surge to 9.6, still above the long-term average of nine.<\/p>\n
Davidson said the reduction highlights the positive impact of lower property values and stronger incomes.<\/p>\n
\u201cSaving for a deposit is just one factor in measuring housing affordability and it currently takes four years less to save a deposit than it might have done at the market\u2019s peak,\u201d he said.<\/p>\n
\u201cIn addition, a lot of first home buyers don\u2019t actually need a 20% deposit anyway, with many taking advantage of the banks\u2019 loan-value-ratio [LVR] allowances.\u201d<\/p>\n
Davidson said affordability may act \u201cless as a handbrake\u201d on property value growth than in previous years.<\/p>\n
\u201cBut there are still limits on how far prices can rise in the near term,\u201d he said.<\/p>\n
\u201cA lasting improvement in housing affordability ultimately requires more homes to be built, not just in absolute terms, but also relative to demand.<\/p>\n
\u201cThe good news is that the Government is already pushing very hard on this lever.\u201d<\/p>\n
Rental affordability still \u2018stretched\u2019<\/p>\n
While affordability for buyers has improved, rental costs remain elevated, the report said.<\/p>\n
Rents currently absorb 27.9% of gross household income nationally \u2013 slightly down from a peak of 28.5% but still above the long-term average of 25.8%.<\/p>\n
While rents had eased in Auckland and Wellington, bringing both markets closer to long-term norms, most other parts of the country continue to record relatively high rent-to-income ratios, Davidson said.<\/p>\n
\u201cRental affordability remains stretched in a number of regions, and some tenants are likely to earn less than the median used in these measures.<\/p>\n
\u201cThat means the real financial pressure for some households is likely to be greater than the headline figures suggest. When rents are already taking up a large share of income, there\u2019s naturally less scope for further increases.\u201d<\/p>\n
Figures released by Barfoot & Thompson yesterday showed rental demand rose for the third consecutive month, but rents remained largely flat.<\/p>\n
Barfoot & Thompson said it received 32,749 inquiries from renters during February, up 6.2% on January (30,850) and 35.5% higher than the same month last year (24,169).<\/p>\n
Applications for properties also increased to 4349, up 6.7% on January and 27.8% year on year.<\/p>\n
In Auckland, the average rent in February was $696.92, just 0.7% higher than a year ago ($692.38). <\/p>\n
Average rents across Northland and Bay of Plenty moved less than 0.2% between January and February.<\/p>\n
\u201cThis dynamic, between rising demand and flat rents, points to the continuation of a price-sensitive renters\u2019 market,\u201d said Barfoot & Thompson\u2019s general manager property management, Anil Anna.<\/p>\n
\u201cCompetition remains strongest among landlords to attract or retain quality tenants.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cHousing certainly isn\u2019t cheap, but for those trying to buy their first home or upgrade, we\u2019re currently seeing…\n","protected":false},"author":2,"featured_media":322831,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[3225,6433,15408,3390,138,37006,3105,380,174374,219,71,3339,18845,25449,5983,111,139,69,3272,1560,418,80],"class_list":["post-322830","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-according","tag-affordability","tag-almost","tag-best","tag-business","tag-cotality","tag-data","tag-decade","tag-decadebest","tag-economy","tag-from","tag-housing","tag-improved","tag-level","tag-levels","tag-new-zealand","tag-newzealand","tag-nz","tag-nzs","tag-report","tag-shows","tag-zealand"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/322830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=322830"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/322830\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/322831"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=322830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=322830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=322830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}