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House prices at the affordable end of the market have stopped rising but they aren't getting any cheaper

House prices at the affordable end of the market have stopped rising but they aren't getting any cheaper

There’s some good news for first home buyers with prices flattening out at the bottom end of the market, according to’s Home Loan Affordability Report.

It shows that the REINZ’s national lower quartile selling price was $590,000 in June, down from $595,000 in May.

More importantly, it was the third consecutive month that the lower quartile price was below the record high of $598,000 set in March.

The lower quartile price is the price point at which 25% of sales are below and 75% are above, representing the lower-priced part of the market that's generally of most interest to first time buyers and also investors.

While the price falls over the last three months were small and prices remain at elevated levels and near their record highs, it's significant they haven't been rising at the levels seen earlier in the year.

While the latest figures represent a flattening of prices rather than a decline, it's significant that the trend is broadly evident across most of the country.

Although there has been much talk of the effect rising mortgage interest rates could have on the housing market, higher rates are unlikely to have been behind the latest slow-down in prices.

According to the Home Loan Affordability Report, the average of the two year fixed mortgage rates offered by the major banks was just 2.53% in June, barely a hair’s breadth above the record low of 2.52% set in May.

That was the first time the average of the two year fixed rates had increased since December 2019, when it jumped from 3.47% to 3.54%.

However, it’s likely that there will be further significant interest rate rises this year and the prospect of rising rates may be making buyers more cautious, helping to keep a lid on prices.

While first home buyers will no doubt be relieved that prices are no longer rising ever further out of reach, they remain at such elevated levels that being able to afford a first home hasn't got any easier.

According to the Home Loan Affordability Report, it would take a couple working full time earning the median rate of pay for 25-29 year olds, 3.2 years to save a 10% deposit for a home at June’s national lower quartile price, assuming they were able to save 20% of their after tax pay each week.

In the Auckland region, where the lower quartile price was $855,000 in June, it would take them 4.6 years to save a 10% deposit, and the resulting mortgage payments would eat up almost 46% of their after-tax pay. 

See the tables below for the full regional and district affordability figures.

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Aucklands LOWER quartile 855k, unbelievable.


When I was hitting puberty in the year 2000 and my parents were earning $50k each as teachers the median price of an Auckland home was $235k. That's median so $855k was mansion territory. Now to buy that same median house (that is now 21yrs older) it's $1.15m (+389%). Luckily average teacher salaries have also increased 389% to $195k. Oh wait...yeah nah.

The mortgage rate in 2000 was about 8.5%. So to service 200k cost 16k per year in interest. According to you that is 16% of 2 teachers making 100k combined.
The only way we have grown the economy while suppressing pay rates is to allow people to borrow more at lower rates to inject money into the economy. Now you can service 640k for the same 16K. The median wage has doubled since 2000 but house prices have quadrupled.
Today those 2 teachers would probably make 160k combined. Servicing the interest on full 855k value of the median home would take 13% of their gross.

Illustrative, thank you.

This does suggest that small increases in interest rates are likely to have big impacts on the economy as a whole, and house prices in particular.


at 10% deposit back in 2000 it would been 23.5K on house price of 235k so on combined wage 100k 23.5% of gross for a deposit.
in 2021 for a 10% deposit going on above that would be 115k on a combined wage of 160k that's 71% of gross for a deposit. OF course they need 20% so 143% of combined wage of 160K.


Lesson learned: buy a house in 2000.

Yep! And buy beer in 2000 as well!

That way you'll be double-happy!


Yes or buy a house in 1974 for only $10k.

We all wished we could've paid yesterday's prices.

In one.
Wages not allowed to rise sufficient to afford lifestyle advertised to up and coming.
So debt is sold to them instead.
Meaning those lending make more money on private debt and selling debt to gov who refuse to tax to raise it.
Brilliant. Electorate not told that on news of course

So much bank speak though, we have stopped talking about principle and wank on about serviceability. Its still a million dollars you owe the tommy tank.

Exactly. It's amazing how many people reply with the serviceability argument without acknowledging the fact the notional amount of your loan is now eye watering. You now have to borrow a crap ton more money to buy the same house. The bigger the mountain of debt, the more serviceability is affected by any increase in interest rates.

Reminds me of the classic John Clarke sketch about banks

@WestieAJ - I get serviceability is about the same. The median is now $1.15m. So at 80% LVR you borrow $920k at 2.5% which is $23k interest or 14% of $160k household income. The kicker being you now have to borrow $920k to buy the same house. $920k! And that's if by some miracle your $160k household managed to muster up the $230k deposit (20%). A 25yr mortgage (usual length back in 2000) of $920k at 2.5% would mean f/n repayments of $1,904. At $80k each w/ student loans and 4% Kiwisaver contributions their household net f/n income would be $3,938.86. So their mortgage repayments would be 48% of their take home pay. Here's where the real issue of having to borrow so much comes into play, at 3.5% the repayments go to $2,125 per f/n, at 4.5% it's $2,359 and 5.5% it's $2,606. So if rates go up to 5.5% (long term average in NZ is 8%) then they could be looking at spending 66% of their take home pay on mortgage repayments. They'll be left with $1,332.86 per f/n or $666.43 per week to potentially pay rates, insurance, utilities, groceries, petrol, school fees etc. Yeah good luck with that.

I wasn't arguing that the current situation is a good one. Just that we can now service bigger debts with the same income. This is a PYRAMID scheme for owner occupiers. The lower interest rates are needed so new entrants can afford buy in and those at the top can cash out. You can chip away the the principle over time while crossing your fingers that the value of the property keeps rising so you have a hope of cashing out yourself at some stage in the future. Maybe you build enough equity to have a line of credit to by a second hand Remuera Tractor to show off to the neighbors .Then it's either rinse and repeat or off to the retirement home. Where the corporate overloads extract the maximum amount of wealth from you they can before you finally die.


Yep, and so we screw NZ productive society and the new generations while a parasitic minority of housing specuvestors reap the benefits of an incompetent RBNZ and a succession of gutless governments.

Im not seeing the value in that. One of my staff had a house across the road from her in New Lynn sell for 1.5m a couple of weeks ago. 4 brms, nothing special. Straight back on for rent at 1000 a week... in new lynn... Ive done all the maths I know and I cant work it out. Is there a special speculation calculator I need to buy ?

Will they actually get $1000 p/w in New Lynn? really?

Difficult to know if now is the right time to buy. As a first time buyer who is now 40, I kind of feel I missed the boat.

Unless the bubble bursts options will increasingly diminish.

If you're in a position to buy and want the stability of your own home then buy. Lock in low rates and start enjoying your own place. No one can tell you if prices will fall but history suggests even after the gfc it didn't go down much and has risen 150% since.

You've got lots time to pay it off so stop agonizing over whether to buy if that's what you want and do it.

It's better than paying rent.

Sure buy keep the bubble afloat. The band is playing on the forward boat deck nothing to see here.

"Unless the bubble bursts options will increasingly diminish."

I have bought and sold homes/properties for the last 28 years. There are always better pricing and value options than the most obvious choices.


Is that headline some kind of sick joke?

Anecdotally, I went on the ANZ banking APP today and my house has dropped in CoreLogic value by 3%. This is at the low end of the market.

same for me!

I imagine it's still worth more than what you paid for it.


Flatlining at absurd prices..

It is mid winter. Need to wait a few months to discern a trend. Otherwise it's just statistical noise!

But the sales rate is still pretty high in this winter, how do you explain that then?

The market for above average still seems hot have just watched an auction in Christchurch GV $850 sold $1.3m another GV $830 sold $1.61m


And what happens when one of these couples aged 25 - 29 wants to have a baby? Money comes from the sky? Do we want people to have babies? Or do we keep importing people? I want my adult children to stay here and start families in a way that is financially realistic.

Don't worry mate, most kiwis and our government don't give a toss about that kind of stuff.
It's each to their own in NZ in 2021.

Smart educated couples are no longer having kids. The planet is pretty much buggered by 2050, nobody in their right mind would start a family at this late stage of the game. Still its a battle of wants vs needs, this planet doesn't need more people on it.


Plenty of smart educated couples are having kids. Just not so many in this country.

Why ? So you can stick them on a treadmill thats going twice as fast as it is currently just to try and survive, the same one the Millennials are all screaming that cannot cope with the speed right now, but I guess if you think about you rather than what your kids future is going to be like its all good. The planet is at a turning point, the future is not looking great. Hate to be a climate DGM but you only need to switch on the news. Still each to their own, its a free world while it lasts.


My observation would be that people overseas aren't so pessimistic and brainwashed into thinking the world is going to end.

I do have deep reservations about having my kids grow up in New Zealand though.



Carlos, because having children is the best work any of us will ever do. Can't imagine life without my children. They grow into these amazing adults.

We are screaming because the costs of basic shelter, let alone the same living standards our parents enjoyed at the same age, is gone. That's not an excuse to keep winding back the fundamentals of our existence to the point where you can't really justify being alive in the first place. I'd like to think we can change the status quo before we get to that point, but based on current experience I am fast losing hope.

That's the way to go, have dumb, uneducated people have the kids, natural selection at its best. Idiocracy come true.

Ive got kids, they are pretty good most of the time. Fairly sure they will look after myself and the wife when we get older, not sure who is going to look after those that don't Guess someone else's kids..maybe not.

Most young people I’ve talked to said there’s no way they’ll have kids. I suggest we’ll have a change of guard very soon. The Union Jack on the flag will need to go, it’ll have no relevance at all. Just a symbol of an old forgotten time. Older NZ generations will take those thoughts to their grave, what an achievement they’ve made.

Give it up John. You had your chance. Go back to pulling pony tails.


Plenty of people I know said they wouldn't have kids earlier in their life, but eventually did.

Hahaha winter stats, Labour will love them so that should tell you something

Sit tight. Keep renting. Wait for the Delta Variant wave. LVR's off again. Interest rates of 1.5% fixed for 3 years.
House prices must never go down.

Yes, I have already seen self-serving housing specuvestors trying to use the Delta Variant or a one-off, one day 2% decrease in the Dow as en excuse for not raising interest rates. Pathetic.

Why this theory is floated every time by different article writers, which give impression that house price stopped rising or falling.
Even google search "house price auckland", suggesting below response.

Auckland's median house price has hit $1.14 million. For that price, you could get a good quality city-fringe apartment, or maybe a standard house in an outer suburb. But if you were to take that $1m and spend it in another country, you could be surprised at what it buys you.

Are you guys following other media houses who stopped asking question on house price & take it as a new normal? or it is floated as a marketing strategy by Labour.

We live in London and have lived here on and off since 2001. We have a house in Auckland but rent here. For the first time I can remember I'm thinking houses in our part of North London seem comparatively cheap. Went to visit a friend's place the other day. 1920s, detached, 5 beds, probably 250 sqm internal, nice big back yard. Needed cosmetic work but nothing structural. £1.1 they paid 6 months ago.

Where in North London? 2.1 mil NZD gets you into the best areas in Auckland it will get your son into Grammar for example. Doubt you can do the equivalent in London for that money.

Mill Hill. There are excellent schools that aren't expensive around there so the standard of education is comparable. Of course you can go private and then the sky's the limit.

So the affordability table is based on what? Income with no kiwisaver and no savings for the family holiday, no kids etc?
How is anyone about to save with kids, rent and occasional drink at a bar and a couple of average in-countrt holiday trips. These tables are really a joke. And god forbid if anyone has a hobby they spend money on.
And if take a debt to buy a house, how does anyone save any money on anything else for next 25 years?

Anybody young and ambitious should not be wasting their best years on this miserable sh*thole.

Melbourne, Sydney, London and beyond. Anywhere but here. You'll have the time of your life. Better pay. Better career. Less of your income on housing. Cheaper everything.

Don't look back.

Sure Australia doesn't have an issue: Never does London

This is a world wide problem, built rampant capitalism, not a New Zealand specific one.

NZ is number one though

Have you lived in London, Sydney or Melbourne?

With that kind of clown response I'm guessing not.

He might not have but I’ve spent many years in 2 of those cities and what you are trying to advocate is a myth.

Please explain.

I'm with you. I saved a whole lot while living in Bondi, so much more than if I stayed in NZ and I had a better time there too. If you to buy a family house though it's better to live outside Sydney.

it's winter...wait until spring. Unless the OCR goes up (by a bit) the house prices will continue the upward trend. Jacinda and Grant can't talk there way out of this one, if they try it will just be an embarrassment for them, sorry it already is

Agreed. The OCR needs a 0.5% bump August, and another 0.25 6 weeks after, or else the Auckland median will be 1.2m by October.

Wow !

FHB are so lucky that fall of 0.84%.

Now this data will be flogged for months, ignoring other strong data / news suggesting otherwise as Mr Orr and Robertson just need a straw to hide behind.

Now do it for single people

It’s so weird when you think that assets such as badly built wooden houses in damp countries should, in fact, depreciate.

They are Uncle - the base currency is depreciating so home values need to increase to make up for it - just look at what a block of cheese cost when you were a kid to what it costs now.

Congratulations WWH, your blood pressure is no longer high. It has stabilised at 140/100

On an annual basis, personal indecisiveness during winters usually results in lament during summers.

Opportunities are only for the prepared minds.

We should all bow before your wisdom /s

I don't see too many minds that are all that prepared for the chaos that is coming over the next few decades. Just more of the same nonsense that brought us here.

What’s worse is when renting is even more expensive than owning in many areas, and some other bugger is getting the capital gains.

Not to mention all the other tangible benefits.

They are both hugely expensive but there’s no other options. Many simply were not born at the right time to benefit from such affordability and then exponential wealth creation.

What hope are they talking about in this article for first home buyers??
This is just non sense.
The world out there is only for people who already have lots of money already and they can make more money by sequezzing the ones who don't have it already.

House in Hamilton purchased for $305K in 2013,just been put back on market $699k.
Plenty of profit there.

And why not... a city of beauty, culture, vibrancy and opportunity.

Close to Auckland too.


Spring is near...plenty of equity rich Mum & Pop investors ready to spend it large on 'affordable homes'. Orr knows this but is asleep at the wheel. Robertsons thinking how he can get another benefit increase through. Jacinda is getting botox for all those in coming frowns...

What happens if the music stops?
Im looking at Yurts, unsure how suitable for potential babies/toddlers they are in temperate soggy Wellington.

"Hope for the first-time buyer"? This headline has been used here before and shot down in flames in the comment section.

"Hope for the first-time buyer"? This headline has been used here before and shot down in flames in the comment section.

"Hope for the first-time buyer"? This headline has been used here before and shot down in flames in the comment section.

"Hope for the first-time buyer"? This headline has been used here before and shot down in flames in the comment section.

"Hope for the first-time buyer"? This headline has been used here before and shot down in flames in the comment section.

"Hope for the first-time buyer"? This headline has been used here before and shot down in flames in the comment section.

"Hope for the first-time buyer"? This headline has been used here before and shot down in flames in the comment section.