Tracking Wellington's housing affordability

The purpose of this page is to summarise information on Wellington's housing affordability*.

(It is a companion page to a similar summary of Auckland's affordability metrics.)

The data below for "Wellington" includes the whole region encompassing the Wairarapa; the components reveal the detail for the four main urban areas.

The housing stresses in Wellington are not as acute as some other regions but many areas still can be classified as stressed for affordability for a single income earner wishing to buy a median or first quartile home. The issue may be an part of the 2014 election debate.

Hopefully the tracking and data on this page will inform that debate.

(H/T to Peter Jeffries at CORT for suggesting these summaries.)

* Actually unless otherwise noted, most of the measures on this page are 'home loan affordability' rather than housing affordability. Home loan affordability measures the relationship between take-home pay (after tax) and a mortgage payment (which includes both an interest and principal component). That means that costs like rates, insurance and maintenance are not usually included. However, when we compare 'renting' and 'owning' options we do adjust to include these costs.

 

First home buyer affordability (individual)

This is the relationship between take-home pay and a mortgage payment. We measure it for one 25-29 year old earner on a median pay who is buying a first-quartile priced house. T

 

Standard home buyer affordability (individual)

This is the relationship between take-home pay and a mortgage payment. We measure it for one 30-34 year old earner on a median pay who is buying a median priced house. The research behind this index is sponsored by AMP360 mortgage advisers.

 

 

First home buyer affordability for households

This is the relationship between take-home pay and a mortgage payment. We measure it for a household of two 25-29 year old people earning 100% of the median pay, and no children.

[Also see this Auckland Council report.]

 

Standard home loan affordability for households

This is the relationship between take-home pay and a mortgage payment. We measure it for a household of one 30-34 year old partner earning 100% of the median pay, one earning 50%, and they have a 5 year old child. If WFF applies, this is added to household income.

 

Rental affordability advantage

This shows how much more of the median income of a two-person 25-29 year old household to takes to buy a lower quartile house than to rent the same house. (We adjust the costs so that ownership includes the mortgage payment, rates, insurance and maintenance, to give a more matched comparison.)

 

Rent ratio

This is the relationship between annual median rent levels and the cost of a median house. It is a core measure of viability or sustainability of core rental stock.

 

Median multiples

This is the relationship between gross household income and median house prices. We measure it for standard buyers in the 30-34 yr age group. (But it is based on gross incomes and does not factor in the effect of any of our three recent tax cuts.)

 
Median
Median
--------------   Median multiple   -------------
 
Population
House
price
H'hold Income
Mar-16
Feb-16
Jan-15
Mar-15
Mar-14
 
Mar-16
Mar-16
Mar-16
times times times times times
 
 
 
annual
 
 
 
 
 
Wellington:
492,000
$460,000
$92,000
4.9 4.9 4.3 4.7 4.6
- Central
210,800
$564,000
$102,000
5.1 5.8 5.3 5.6 5.3
- Hutt Valley
148,500
$406,000
$90,000
4.3 4.1
4.1
4.1 4.1
- Porirua
53,000
$470,000
$88,000
5.3 5.3 4.4 5.1 4.9
- Kapiti Coast
50,000
$392,700
$80,000
4.9
4.7 4.8 4.7 5.0
 
 
 
 
 
 
 
 
 
New Zealand 4,510,000 $485,000 $85,000 5.8 5.3 5.3 5.8 5.5

 

We welcome comments for improvements of the data on this page. Use our feedback page, or the comment box below (which will show if you are registered).

Contact:

For sources, definitions, and methodologies, please contact:

David Chaston
Publisher,
www.interest.co.nz
JDJL Limited
206 Jervois Road, level 1, Herne Bay
PO Box 47-756, Ponsonby
Auckland, New Zealand

Phone: +64 (0)9 360-9670
Mobile: +64 (0)21 997 311
Fax:       +64 (0)9 360-9319
Email:   david.chaston@interest.co.nz