Photo: RNZ
Home affordability is improving almost everywhere in the country, but debt-to-value restrictions means average house prices in the biggest cities will continue to be a stretch for those earning an average income.
Massey University's Home Affordability Report indicates there had been a 4.4 percent improvement in the national rate of affordability in the three-month period ended in August, following a trend which began in the last three months of 2023.
The report shows the median house price was down in 11 regions, with the greatest decrease being in the West Coast region, where values fell nearly 12 percent or by $48,000.
"These latest results have fed into the 0.3 percent decrease in median house prices we've seen overall this year," report author Dr Arshad Javed, from the Massey University Real Estate Analysis Unit, said.
At the national level, overall median house prices fell by 0.6 percent, or $5,000 in the most recent quarter.
However, he said the median national house price was still 9.8 times more than the median wage.
So affordability would continue to be a stretch for those earning less than the median, given debt-to-income restrictions imposed by the Reserve Bank in July.
The restrictions limits the debt-to-income ratio for owner-occupiers at six times the size of the mortgage, or seven times for investors.
Still, Javad said prices were falling, which improved affordability for many.
"Currently it is a buyers' market and a right time for first home buyers to get on the property ladder," he said.