sign uplog in
Want to go ad-free? Find out how, here.

Roost Home Loan Affordability reports for November show affordability deteriorates as median house prices hit record highs

Roost Home Loan Affordability reports for November show affordability deteriorates as median house prices hit record highs

Home loan affordability worsened nationally in November because of a rise in median house prices to fresh record highs with the biggest deteriorations seen in central Auckland and Wellington.

However, low interest rates and the prospect they will stay lower for longer is boosting demand for home loans and helping to keep affordability at near its best levels since 2004.

Fixed and floating mortgage rates were steady at record lows in November and most economists now expect the Reserve Bank to hold the Official Cash Rate at 2.5% until late next year given the economic uncertainty generated by the European financial crisis.

“Home buying activity has improved along with the weather and the outlook for continued low interest rates,” said Rhonda Maxwell, spokeswoman for mortgage broking group Roost Home Loans.

“First home buyers are more confident about interest rates staying lower for longer and can see banks are competing hard for their business,” Maxwell said.

Affordability deteriorated nationally, with higher prices in Northland, North Shore, Central Auckland, South Auckland, Wellington, Christchurch and Dunedin. The median house price rose to NZ$367,500, which increased the proportion of after tax income needed to service an 80% mortgage on a median house to 53.8% in November from 52.6% in October, the Roost Home Loan Affordability report shows.

Affordability worsened dramatically in central Auckland because of a sharp rise in the median price. See the main report for links to regional reports.

A young couple earning the median wage could afford to buy a first quartile priced house in November, with 22.1% of their disposable income required to service an 80% mortgage. This is up from 21.1% in October and just above its best levels since August 2004.

The Roost Home Loan Affordability report measures affordability nationally and regionally for individual income earners and households, taking into account median house prices, interest rates and incomes in their regions and cities.

Affordability has generally been improving since December 2009 as house prices have flattened out and interest rates have fallen, although there has been some deterioration in recent months as house prices have firmed again.

More than 50% of home owners are now on floating mortgages and most new borrowers are choosing to float, given advertised floating rates at around 5.75% are cheaper than average longer term fixed rates at around 6.2%. The Home Loan Affordability reports use the floating rate.

Affordability for households with more than one income deteriorated in November because of the rise in median house prices. This measure of a ‘standard typical household' found the proportion of after tax income needed to service the mortgage on a median house rose to 35.2% from 34.5% in October.

This measure assumes one median male income; half a median female income aged 30-35 and a 5-year-old child that receives Working-for-Families benefits. Any level over 40% is considered unaffordable for a household, whereas any level closer to 30% has coincided with increased buyer demand in the past.

The first home buyer household measure assumes a first home buyer household includes a median male income and a median female income aged 25-29 with no children. Any level over 30% is considered unaffordable in the longer term for such a household, while any level closer to 20% is seen as attractive and coinciding with strong demand.

The full Roost Home Loan Affordability reports for standard buyers, including links to all regional and city reports, are here »

The Roost First Home Buyer Affordability reports are here »

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


How in the name of good god almighty is it that with the population outflow to Oz, the recession etc that house pricesare rising anywhere other than, maybe, Auckland. Could it be they are falling into the hands of foreign landlords. Active interference is going to have to be made to reconcile the price of homing oneself against the income earned.That is surely going to be a first step back to a decent society, something we are far, far away from at the moment

Despite the net outflow to Oz, the population of NZ is still rising.  So demand is also rising and new builds (new supply) are few and far between.


Unaffordable suburbs are all infested by foreigners so the young ones are all fleeing to Oz I'd say.

I work with a bunch of 'foreigners'. We are all foreigners here(not gonna get into the maori debate).To a man (and woman) they are good people bringing colourful diversity. Wish they would settle beyond Auckland a bit more. 

You don't need to make a value judgement on foreingners but if large numbers (as has happened since 1994) arrive and they push locals out of the housing market while requiring taxpayer funded infrastructure then we should look after our own people. It is assumed that the government governs in the best interests of the majority of its citizens.


New Zealand now boasts one of the highest rates of home unaffordability in the world as a result of prices rising far faster than incomes, and the government's Savings Working Group blames that squarely on the policies of successive governments.


At issue is what is New Zealand; what is it that makes New Zealand special? Phill Best (developer) would like to see us with a population ten times larger than today. Hugh Pavletich berats the green and pleasant land for protecting it's villages: growth is good! growth has no negative consequences!


No political party advocating growth (National, Labour Green Party) has a coherent plan other than more people bring their savings; require goods and services; bring economies of scale........ will become a great economic success ... in the future.



The term 'infested' used by the poster implies its own value judgement. Important to counter this sentiment. 

In this post,  you quote NZ's home unaffordability and in your subsequent post, "The attraction with New Zealand property as an investment is the low barrier to entry, favourable and stable exchange rates and the tax system. Property price growth is closely linked to population  growth.  Expected population growth in New Zealand's major cities provides a sound basis for increasing property value. Property prices are also relatively undervalued compared to its trading partners and closest neighbour Australia."

So property is unaffordable for locals(main centres?) but undervalued internationally? Is that your understanding? 

You also refer to the internationalism of todays youth. Agreed. With this in mind and if we are to agree to the above point the youth of today and the future will be facing ever increasing competition. Education and upskilling is surely the answer.

I am presently going back to school to facilitate my families move to the regions in a couple of years. My current skill set, experience and qualifications will not be particularly relevant so needs must. Quite excited about it. Yes a hit in the pocket but a necessary step to fulfilling our goals. 

I think Kiwis need to get proactive about looking after ones self and making a plan, sticking to it. Internationalism is definitely the future excluding the inevitable bouts of protectionism that follow structural events like we are currently experiencing(in the early stages of)

If international competition in the main centres drives many to look beyond these area's all well and good. The regions have been bleeding talent for too long. And talk about the quality of life. Second to none in my relatively varied experience.

I recall a movie a few years ago, about a staunch communist who had been in a coma since 1989, and when he came round, his family went to enormous lengths to try and protect him from the knowledge that Communism had collapsed.

Here's a suggestion for a new movie. Some omnipotent power builds dozens of new cities around NZ, with about 25 million extra people, without the existing population and the conservation activists even noticing.

Bear in mind that the Netherlands is 14 million people on a piece of land the size of Canterbury. It would not be hard, using maps and Google Earth, to plonk 25 million extra people around NZ in spots none of the current major cities inhabitants would even notice.

By the way, I am not a developer. My interest in this issue, stems from my particular acquaintance with young couples having financial struggles. I regard the housing racket as the single most blameworthy factor in this.

I regard the spin and mythology against the role of  "developers" in all this, as a disgrace. Without the racket run by local government, developers would make honest profits providing housing at a fair price. As it is, they HAVE to either become "gamers" of the system or go out of business.

Banks and mortgage lenders also have to either go out of business, or compete to provide mortgage finance in a market that is guaranteed, thanks to the land racket, to rise faster than young people can save a deposit.

There is a lot of woolly thinking out there, that blames everything but the right factor.


While knowing little about the ins and outs of council functionality the only illumination I can provide is a reflection of personal experience. A long time freind is a council employee in the region I plan on moving to. He works in resource consents. His peer group has evolved around his working environment as he was new to the area on taking the job and kicks about with a bunch of the engineers. In informal settings I have attended with him the angst you speak of towards the planners has been palpable on many an occasion.

Entirely analagous to my role in certifiction. The policy writers in my field are so far removed from the economic reality that an air of outright disdain prevails. So much so that often employees on the front line(me) are instructed by their immediate supervisors to act outside the guidelines/standards set by these 'experts'. Frustrating to say the least. They add no value to the organisation yet soak up a fair bit of capital in salaries, a fair bit more than the front line who cop all the s#$t for the unworkable protocals they create.

Unaccountable Dicks. 

Thanks Leadbelly, that's very confirming. I am starting to hear stories like this more and more. I know of engineers in the councils who are frustrated that a bunch of utopian ideologues came out of uni and shoved them aside, and made the modus operandi "no we can't" instead of "yes we can".

This is a frustrating example of ideological takeover of modern civilisation. There are plenty of others eg read Theodore Dalrymple's "Real Crime, Fake Justice" on ideological capture of crime and justice departments.

We have always gone overseas in droves. Venomous outrage is often expressed when the desire to get ahead financially via our particular field of interest leads us offshore. This reflects the fantastic quality of life we can enjoy here. We are bitterly disappointed to have to give that up. 

Oppertunity invariably leads to sacrifice in one form or another.  

I freakin love this place.

Just you wait, 'enry 'iggins, just you wait!
You'll be sorry, but your tears'll be to late!
You'll be broke, and I'll have money;
Will I help you? Don't be funny!
Just you wait, 'enry 'iggins, just you wait!

Median prices at a record high.

Mortgage approvals at highest since 2007.

Interest rates at record low.


With this situation - The market doesnt need anyone to talk it up.


With this situation, those who bought when the bubble burst in early 2008 would be laughing all the way to the banks.

And bought in the regions while working in the big smoke, great tenants in the mean time looking after the joint and paying it off. Debt level already servicable if rates spike. 2 more years of motorway madness and hello surf and schnappers whilst the young fella starts school down the road. Make a plan, see it through.

I freakin LOVE this place.

This whole thing is full of fallacies.

Every bubble in the world works this way. It is councils running rackets in urban land that is the underlying problem.

Sure, prices creep up and up and up, but the volumes drop and drop and drop.

If you SELL "at the right time", you are a lucky exception, not the norm.

Meanwhile, any young person that buys in at the bottom of this Ponzi instead of renting, is set up for a life of fiscal child abuse from the banks and of course the lucky vendor.

Can Kiwis not use a calculator? A small mortgage at a high rate of interest costs you far less in a lifetime than a large mortgage at a low rate of interest. Furthermore, the high rate of interest has nowhere to go but down, the low rate has nowhere to go but up. This is fiscal child abuse.

Sack the planners and let the developers rip. Now. The engineers in the councils are spewing with frustration over all the CRAP that the politicians and the planners are spouting.

You talk about bubbles etc but what you don't talk about is population biology, gentetics and limits to growth. In your world you just poor people, entrepreneurs, available resources and everything comes out smelling of roses.

I can believe you and Hugh on affordability but not on quality of life; you think humans have no impact on the environment: we are mere ants; you could fit us all on Lake Taupo.

But the eco-loonies all want us to live like they do in Europe - high population densities, walkable communities, commuter rail, etc etc etc.

Guess what? Europe as a whole is far more densely populated than China or India.

How's their quality of life? Eco-loonies who cry over sprawling US cities, point to Europe as the ideal. Are Europeans starving and running out of everything?

The Netherlands has 14 million people in a space the size of Canterbury. The anti-car eco-loonies love the cycling, the walking, and the public transport in the Netherlands.

The result of trying to compress 4 million people as our idiot urban planners are trying to, is to get ourselves all the costs of density and none of the benefits of scale.

Even the UK economy is terminally stuffed now after 60 years of this. The Netherlands is actually not as stuffed because they do not run a racket in "planning gain".

I ask the defenders of urban growth constraints again and again - why do you not advocate compulsory purchase of developable land (or eminent domain) so we can have our "containment" cake and eat it too - keeping urban land and housing prices low and stable? Is all this agitation for urban containment nothing more than a corrupt racket to deliver capital gains to well placed people?

What are you, JH? A land banker, an inner city property owner, or just another useful idiot for these people, like the Baptists were useful idiots for the Bootleggers during Prohibition?

Market forces = Hummer driving developer bowling the villas of Merivale, replacing with concrete slums designed by mathematician.

Not necessarily, at all. It is the PLANNERS who want the concrete slums. Developers actually bother to provide what PEOPLE want, but have to take account of the planners constraints on what the proles are to be allowed to have.

Read "The Perils of Urban Consolidation" by Patrick Troy. Thumbnail quote: increased density is just code for reduced standards for people who can't afford to buy their way out of it.

Financial freedom is probably the dream of most.
The ability to do what you want whenever you want.

Wealth and Financial freedom tend to go hand in hand, the only differing factor is how much each person considers they need to be Wealthy or Financially free.

If you look at any of the World's Richest People (US "Forbes 400 Richest Americans", or Australia's "BRW Rich 200 List"), you will see these people have generated their wealth from a wide variety of businesses and professions, and all invest in real-estate as an important Wealth creation mechanism.
90% of millionaires get there by investing in real-estate.

The attraction with New Zealand property as an investment is the low barrier to entry, favourable and stable exchange rates and the tax system. Property price growth is closely linked to population  growth.  Expected population growth in New Zealand's major cities provides a sound basis for increasing property value. Property prices are also relatively undervalued compared to its trading partners and closest neighbour Australia.


HUH? Is affordable housing not part of freedom?

Notice that the most freedom-lovin' parts of the USA do not have Smart Growth, do not have a housing affordability problem, and did not have a bubble and a crash. The problems are restricted to the big-gummint nanny state, "protect" the poor, "protect" the environment States and cities like California.

By the way, I am the first to argue that it is wrong that so many rich people today attain their wealth via "property". Bill Gates gets wealthy because he sells things to people, that provide value in their own lives, of a lot more than the asking price of the product.

The MORE a system incentivises rather than penalises this sort of thing, the better off everyone will be, even if some of the BEST providers of value become disproportionally wealthy in the process.

What really matters most, is zero-sum wealth transfers and non-productive rent-seeking in an economy.

George Soros, for example, has made massive capital gains on CBD property investments.

Economies that MINIMISE such gains, will suffer far less hindrance to social mobility even if "producers" get rich. In fact, wealth transfers and successful rent seeking HINDER genuine "producers" of wealth from doing so.

One of the outstanding illustrations of this, are the low-regulation cities in Texas, where urban land values are low and stable (and land value curves are close to flat accross the entire urban area) and have been for decades. Soros type investors hate this. Mortgage lending institutions hate this. Wall Street hates this. There was little earnings to be made from inventive mortgage-security-related financial instruments involving Texas real estate.

Guess why George Soros and the Rockefellers (among others) liberally fund environmental preservation groups and "agenda 21" type organisations? Hmmmm, perhaps they get the connection between conservation and smart growth and the value of their property holdings?

There was little volatility in property prices, and little money lost in the famous "crash". (Texas can genuinely claim to have suffered "fallout" not at all of their own making).

Even so, as Rick Perry points out, three quarters to two thirds of ALL new employment in the USA since 2007, has occurred in Texas. So what if workplace laws are weak and wages comparatively low? The cost of housing is and always has been, low, and discretionary spending has been higher than famous "liberal" states with high wages BUT even higher housing prices that require more than 70% of the average income, to buy.

Inequality has been increasing faster in California than any other US State, in spite of their famously "high incomes", dedication to "protecting" employees, and massive State government spending of all kinds. The price of housing, thanks to environmental preservation, is the most powerful possible driver of inequality that any economy can introduce into itself.

“Chinese economy we all know about…
Chinese government says it’s time to grow offshore…..
Let’s take a good selection of New Zealands “products” over….
“We’re all New Zealanders, we all love the country so I think it’s healthy for us to have the debate and make the right decisions for our country…. but hey!…. young people coming through see it as “our planet” rather than “our country”
Harcourts Showcase more than 800 million of property in Shanghai

With the global warming it is suggested that more rain but less snow will fall in the Southern Alps. That means (perhaps) less snow blown east to fill the hydro lakes.

Thast one of the projections Ive seen.....which means dry winters which means power shortages....


Go nuclear. The French are laughing themselves silly at the rest of the world lumbering themselves with "carbon trading" cost impositions and NOT going nuclear. The French love the economic advantage they are getting themselves.

Meanwhile PB the folks anywheres near Fukushima are sh----ng themselves with worry over cancer rates soon to spike across that eastern region of Honshu...they feel so pleased to be in the nuclear power club...

Bet you a couple of dozen fuel rods the French reactors are no safer than those at Fukushima or three mile island for that matter....or indeed the UK filth on the coast of the Lakes District where plutonium continues to wash ashore...

What say you to some Fukushima farmland as chips for the next oh 20000 years....

You're screaming, PB. Try the little blue ones in the other bottle.

PhilBest - France has one of the longest lists of nuclear power plant incidents among Europe. Now in economic/ financial difficult times I wouldn’t be surprised, saving measures take place and as a consequence incidents occur more frequently – even a serious case.

 Not ideal:

Human life is dangerous - hold the front page.

Nuclear energy has resulted in how many deaths per unit of energy generated......?

Compared to, say, coal mining in NZ alone.........?

George Monbiot is a rare Greenie honest enough to admit that Fukushima is an example of how SAFE nuclear energy is. I mean, 18,000 people dead from an earthquake and Tsunami, and we get obsessed because some nuclear plants safety provisions failed to the extent of letting some tiny bit of radiation leak? I mean, tiny - it is all very well to say it's "500 times natural background levels" in the gills of fish or something - it's still only a tiny fraction of "harmful". Have you heard of hormesis?

This is just a particularly Luddite beat-up.

Have you ever heard Sir Paul Callaghan speaking his mind about NZ's stance on Nuclear energy? He rates it as extremely damaging to whatever pretence we might have to become a "knowledge economy". I recommend the book "Nuclear New Zealand" by Andrew McEwan - Callaghan wrote the foreword.

Professor Sir Paul Callaghan of Victoria University has won science awards and accolades all over the world and even been awarded NZ's "Principal Companion of the Order of Merit" in recent New Years honors. Here is his opinion on NZ's iconic "nuclear free" law:

"The 1992 Somers Commission, comprising some of NZ's most capable minds, was ignored......


"......The myth of our nuclear-free status might seem harmless enough, but to those who deal in rational scientific debate, the costs of such sophistry appear corrosive. New Zealand lays claim to be a civilised, well-educated nation. We are unwise to deal in falsehood, because in doing so we demean the value of knowledge itself. In a world where knowledge generates wealth, we potentially set ourselves on a pathway to poverty. Further, New Zealand is a small country that trades extensively, a process that depends on internationally agreed scientific criteria. If we are to afford ourselves the luxury of ill-informed superstition, then we can hardly complain when our nearest neighbour refuses to import our apples, claiming disease fears that, we assert, have no scientific foundation. And if we are to solve our rapidly looming energy crisis, we will need to cast our prejudices to the wind. From now on, all our energy choices are hard.


Whether a fear of witchcraft, a religious zealotry, a denial of fact or a dogmatic rejection of scientific principles, unreason and superstition have their own dangerous dynamic. If we can be nuclear free, we can be GE free. If we can be GE free, we can be totally organic. The list goes on. Instead of being the Switzerland of the South Pacific, producing high-value, knowledge-based exports, we run the risk of drifting into economic decline, sustained only by an arcadian, utopian self-image....." 


(From the foreword to "Nuclear New Zealand", (2004) by Dr Andrew McEwan - another top NZ scientist).

After living for years 30km nearby 2 nuclear power plants and endless debates in these surrounding communities about the pros and contras, PhilBest let me say this: Nuclear Power is fine, until a catastrophic event is happening – some warnings have already occurred.


I don't understand why NZ would need to consider nuclear power sources when we have so many other options. Windy Wellington is nearly self powered  now due to the Makara wind farm, the South has hydro generation and Auckland could be geothermally powered if they could just tap into that volcano beneath them. Just take the 5 billion odd you would spend on a nuclear power plant and buy and install solar water heaters for every house in NZ. No transmission losses, less strain on the power grid, no nuclear waste to dispose of, pats on the back all round.

69er – correct - furthermore who is building/ managing/ maintaining these plant(s) mostly foreigners. Where do we have a nuclear power plant and to what costs - just another megalomaniac project we, NZ cannot handle.

Now in difficult times, is it not better to develop our own alternative power supply ? Planning and manufacturing/ installation/ maintenance guarantees employment, skill and knowledge of our own NZworkforce ?


I agree Kunst, so far 'think big' hasn't really worked for us. Probably the easiest way to fix the power generation issue is just to use power smarter.  Do we really need the extra chest freezer in the garage? Do we need to leave the computers going when we knock off at night? More natural lighting in factories? Higher efficiency street lights? Who wants a case of the guilts when they turn on their 750w plasma screen?


69er - good to read comments, which fits affordability and feasibility, the profile of Kiwiland.

I’m often stunned by people’s and the government’s gigantic, ambitions infrastructure plans and foreign projects, we cannot pay for and have no control of.

I agree there is no shortage of options. Coal remains the cheapest by far though.

I do find it ironic that there is so much complaining about energy prices, along with a total electoral dismissal of any political parties that WON'T force the prices up massively over the decades to come due to CO2 hysteria.

Just one of numerous examples of blinkered Kiwi "have cake, will eat it too" attitudes. We'll be a world leader on emissions reductions, but no-one will have to pay more for power except a few rich fat cats. It's all the energy companies fault anyway.

The worst such example is the belief that somehow we can "save the environment" and be a world leader in "sustainability" and not use resources, and keep living the way we do, making each other coffee, cutting each others hair, catching the train to the office job - world leading free health care, world leading free education........

This attitude in the decadent West has a lot to do with why we need to borrow money from the Chinese to keep it up.

Nuclear power is the way forward.  Don't believe all the anti nuclear propaganda you read.  How can anybody sane person support wind or water (hydro) generation for a developed economy?  The Greens say it will work, but you won't be able to have hardly any of the goodies we now take for granted.

OMG, what utter rubbish! There still are people like you then? Jezz if you knew anything about electricity/power generation you would know this:

1: Nuclear reactors are not cheap for a country that has NO domestic uranium

2: A simple change of legislation is all that is needed to the Power Utility laws in the country that basically enforced monopolies as soul right holders to grid generation

3: Many large NZ(and overseas) factories have the capability to generate massive amounts of electricity from their OWN generated waste heat, only to be stopped by stupid laws that prohibit "cross street" generation.

4: Fossil fuels will never be replaced fully for atleast 50-60 years, until then a 'transition' must be made and fast, and that transition is allowing WHO EVER to sell power back to the grid via either "micro" generation or industry heat waste recycling.

5: One nuclear option that has never seen it's real potential was the first kind of reactors known as "Thorium reactors", They are the cleanest with very little nuclear waste created and  no chance of nuclear meltdowns. The reason they were NEVER allowed to be fully develop for domestic power supplies was because they produce NO nuclear weapons material as a by-product.


Please provide sources for "Nuclear power is not cheap for a country that has no domestic uranium".  What proportion of the cost of producing nuclear power is accounted for by the cost of acquiring uranium?

In what way do New Zealand's several power companies have a monopoly on grid generation? 

I do not know what "cross street generation" means and a Google search for the term leaves me none the wiser.

What prevents "WHO EVER" from selling power back to the grid now?

What is your evidence for your statement about political constraints on the use of thorium power?


I can't confirm it, but my knowledge is that the electricity supply was fairly well stitched up until recently. It was (possibly still is) mandatory to be connected to the grid if the supply was at your property boundary. It was illegal to generate your own electricity and sell it back ot the grid, you could not even connect back to the grid in order to feed it. Cross street generation is not a familiar term to me, but it seems obvious that it means one business that produces energy as a byproduct can sell that energy to a neighbouring business with a demand for it. Any business with waste biomass products could be in a position to generate electricity from this waste. Many industrial sites in rural areas produce some of their own power by utilising waste, so it seems nonsensical that urban businesses can't sell their surplus to a neighbour. You can recover energy within your own site, but not export it. Crazy. But that is the way it works. 

Right on Frazcam.....hey there's a real cheap luxury resort for sale in Japan mate...some place called Fuku could be on to winner there're into something more European...hows about a nice wee bungalow on a beach in the lake District don't need a power supply there mate....the sand is run through with Plutonium and the fish come half cooked...been like that since the 50s!!!!

Don't believe me...Google it and learn...cancer rates in the schools went into orbit until the govt hushed it all up and renamed the shite of a nuclear facility.