Isn't it funny that when things are said to be affordable the economic conditions are such that only those cashed up from the last boom are in a position to be able to access that window of advantage.

Andy, just because they are being advertised as being affordable, doesn't mean people should buy. In fact just the opposite, now is not the time to buy with such uncertainty. I guess with a ASB sponsoring the videos, does mean that they have to post those types of stories, as the ASB are in the business of selling mortgages.

The index is an interest.co.nz flagship which gets picked up by all the major daily newspapers. If I recall, it was indeed one of these articles noting interest.co.nz as the source that brought me to this website in the first instance. That has to be a good thing, as I've learned a whole lot from the conversations. The methodology used over time has been consistant and there were few objections when that methodology highlighted how unaffordable houses were.

I find the index useful in thinking about existing homeowners with existing mortgages where affordability will be improving if they are re-financing at this point in time. Given capital is eroding for those who bought during the peak, it's at least comfort to know that their cashflow might be on the improve (even if for a brief time).

"andy hamilton Says:

January 22nd, 2009 at 7:36 pm
Hmmm a second piece on this, you seem very, very keen to bang this particular drum Bernard. A sceptic might find it hard to square your earlier prediction that house prices here will fall by 30% with your seeming keeness to emphasise that housing is suddenly affordable"

With interest rates under 5% for winter added to bernards expectation of house prices falling at least another 20% soon after winter, Bernard will be expecting home affordability to be much more than the greatest in history. Perhaps interest.co.nz could publicise their forecast now for house affordability in late 2009..

In everywhere except NZ it seems housing affordability is measured on the ratio of incomes to house prices. As this report shows NZ housing remains the second most unaffordable in the world:

http://www.nbr.co.nz/article/new-zealand-housing-second-most-unaffordabl...

Danielle - no doubt Aus will, although I think punters are not picking large drops there due to the relative strength of the economy, as well as their migration characteristics (relative to NZ, not many Aussies emmigrate, and Aus continues to remain a very attractive destination for migrants from around the world including NZ)

I don't think there is an under supply of houses,especially as so many people are leaving NZ for the land of Oz. I do thin however that there is an under supply of quality houses, as many NZ houses are pretty poor quality. The problem at the moment is houses aren't moving, as buyers who have found a house they want to buy, can't buy it because they can't sell their own house. We have a house for sale, and we have had 3 offers, but all are conditional on them selling their own houses, and we have been waiting for months for them to sell their houses. People also can't get finance, so they are being forced to sell first before they buy, rather than get bridging finance. Also people don't want to be stuck with 2 houses, if they buy before they sell, in these economic times, as they may never be able to sell their house.

Goverment should ban all mortgages without deposits!

New crisis is coming quickly - 125% mortgages.