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See Party Policies here. Party Lists here.'s Home Loan Affordability Reports show first home buyers are benefiting from falling house prices in Auckland's Home Loan Affordability Reports show first home buyers are benefiting from falling house prices in Auckland
First home buyers should be cautiously optimistic about their prospects in the New Year.

By Greg Ninness

There has been a significant improvement in housing affordability on Auckland’s southern outskirts thanks to falls in lower quartile house prices in Papakura and Franklin, according to’s latest Home Loan Affordability Reports.

The reports track the monthly movements in the Real Estate Institute of New Zealand’s lower quartile selling prices in 28 districts throughout the country, and compares them with movements in mortgage interest rates and wages to estimate changes in housing affordability for first home buyers in each district.

In November the lower quartile selling price in Papakura dropped to $549,000 from $575,000 in October, putting it well below its June peak of $588,000 but still above the November 2016 lower quartile price of $537,000.

In nearby Franklin (which includes Pukekohe) the lower quartile price dropped to $540,000 in November from $569,000 in October, well down from its January peak of $580,000, but still above the November 2016 price of $495,000.

That puts Papakura and Franklin squarely into affordable territory for first home buyers.

Separate Home Loan Affordability Reports are available for each of the following regions and cities (click to view).
Northland Region
Whangarei District
Auckland Region
Rodney District
North Shore District
Waitakere District
Central Auckland District
Manukau District
Papakura District
Franklin District
Waikato Region
Hamilton District
Bay of Plenty Region
Tauranga District
Rotorua District
Hawke's Bay Region
Napier District
Hastings District
Gisborne District
Taranaki Region
New Plymouth District
Manawatu/Whanganui Region
Palmerston North District
Whanganui District
Wellington Region
Masterton District
Kapiti District
Porirua District
Hutt Valley District
Wellington City
Nelson/Marlborough Region
Nelson City
Canterbury Region
Christchurch District
Timaru District
Otago Region
Dunedin District
Queenstown-Lakes District
Southland Region
Invercargill District
All New Zealand

The Home Loan Affordability Reports estimate that the mortgage payments on homes purchased at November’s lower quartile prices in Papakura and Franklin, would take up just over a third (35.4% and 34.7% respectively) of typical first home buyers’ take home pay.

Mortgage payments are considered affordable when they take less than 40% of take home pay.

However Papakura and Franklin remain the only parts of Auckland where housing could be considered affordable for first home buyers.

Is the worm turning elsewhere in Auckland?

In the rest of Auckland excluding Papakura and Franklin, lower quartile prices are so high that mortgage payments on homes purchased at those prices would eat up between 43% and 56% of typical first home buyers' take home pay, putting them well into unaffordable territory.

However things may be about to change.

The regional figures for the whole of Auckland show there has been very little change in the region’s overall lower quartile house price for more than a year, creating a stable rather than favourable environment for first home buyers in the region.

The Home Loan Affordability reports show that the REINZ’s lower quartile selling price for the Auckland region has been largely steady since August last year, when it hit $655,000.

Since then, apart from a brief dip down to $630,000 in February this year and then hitting a peak of $680,000 in March, it has remained within a narrow range between $640,000 and $675,000.

In November this year the lower quartile selling price was $660,000 compared to $675,000 in November last year. November this year was the fourth month in a row that the lower quartile price has been below the price for the same month of last year.

So while the lower quartile price has moved up or down from month to month, the movements have mostly been small, and the overall picture is that the lower quartile price in Auckland has been largely flat for around 16 months.

While that may not be good news for property owners hoping for capital gains, it does appear to have signalled an end to the seemingly endless rise of Auckland house prices that was a feature of the market over the previous three or four years.

Low mortgage rates helping

First home buyers would also have been helped by the fact that mortgage interest rates have remained at historically low levels over the last 12 months.

Although there have been movements in interest rates over the last year they have also been relatively minor. The average of the two year fixed rates offered by the major banks was 4.78% in November compared to 4.51% in November last year.

The fact that lower quartile prices have been moving sideways at a time when mortgage interest rates have remained near their record lows suggests the puff has come out of the affordable end of Auckland’s property market.

The decline of lower quartile prices in Papakura and Franklin has come after a period of weakness in those markets largely caused by relatively low levels of investor activity.

It remains to be seen whether the falls in prices in Papakura and Franklin will be sustained or perhaps even accelerate in the New Year, or if price falls will spread to other parts of Auckland.

But Papakura and Franklin aren’t the only parts of Auckland where sales have been weak compared to previous years, and there are signs of rising levels of unsold homes throughout the region as we head towards the Christmas holiday break.

Cautious optimism

Given the current market conditions, first home buyers in Auckland would be justified in being cautiously optimistic that affordability could improve for them in the New Year, bringing the prospect of owning their own home a little more within their reach.

The only centre outside Auckland where housing is also unaffordable for first home buyers is Queenstown, which sits just behind Auckland’s North Shore as the second most expensive district in the country.

But housing remains affordable everywhere else.

Even in major centres such as Tauranga, Hamilton, Wellington and Christchurch, the dream of home ownership should be within reach of first home buyers on average incomes, provided they can rein in their expenses to a level that will enable them to scrape together a deposit.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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I feel sorry for the young couple in the photo. Chances are they will be so buried in debt they will be struggling to start a family as two incomes needed. Today, smart and young, tomorrow, grey and hospitalized - then separated.

Today's housing affordability.....(sigh)

Back in the 70's in the UK they could have relied on rampant inflation to make the unaffordable house into a cheap home within a couple of years and start their family. Now we have the curse of low inflation. But I'm retired I rather like it.

Even in New Zealand during the 70's to a certain extent.

lol, I actually feel sorry for you RP, looks like you are running out of excuses and puff ... !!

This shows that there are many affordable homes in Auckland ... and affordability will surely improve with time because of wage growth, low inflation, low interest rates and steady house prices.

So, " The Home Loan Affordability reports show that the REINZ’s lower quartile selling price for the Auckland region has been largely steady since August last year, when it hit $655,000." .... hmmm!! wow...

With all these numbers and reports, many including the writer, are struggling to keep up the momentum of pessimism and the tone obviously seems to be changing ..!

I said many months ago that old dressed up rubbish stock sold 2-3 years ago will fall to meet their actual values after the fury of speculative market storm was over ... certainly older and tired house prices will always be pushed down when new and modern dwellings are built in the same area .. and Franklin is a very good example.... Quality, modern and new housing in the same areas are holding their prices despite the big building projects there.

The housing market in Auckland has come off the boil and it will keep simmering for some time - crying on spilled milk is usually useless ! ... better use that energy a bit more positively...


Yup, Raven started raving ;-)

lol, happy to see that you've got the message !!

Looks like they are about to start a family.

Well they can cut back on the gourmet pizza and smashed avocado for a start.

Well they can cut back on the gourmet pizza and smashed avocado for a start.

Few problems there. The NZ economy relies more on consumer spend for things such as gourmet pizza and avocados than it does for people who it inside eating porridge and don't use or own smartphones and don't subscribe to Sky TV. It's a double-edged sword unfortunately. Remove the consumer economy and house prices would plummet. Most people don't understand the relationship between property bubbles and consumer spending.

Furthermore, NZ cannot transition to a low-cost economy for FMCG. We do not have the scale nor do we have the innovation capabilities. We're good at producing high-cost niche products and services, but we are not Japan or America.

I thought 2 incomes for a young family is a norm everywhere in the world. The day of a stay-at home mum is long gone. If a couple only has single income and hope to own a home and start a family then I think they need a reality check.

Commenter NZdan is achieving this dream in Masterton.


Waitakere is also dropping in the lower quartile and the North Shore is flat. IMO those areas have a long way to drop.

Remember this data is only based on those houses that have sold and we know that the bottom half of the Auckland market has been in the doldrums for most of this year with very low sales volume

More to come I suspect

Yep this is the real story right here. FHB's do not get sucked into this mess.


Sales will be sluggish for years unless sellers become more realistic with their price expectation and meet the market. High mortgage debt will start to impact on prices in 2018. At best a flattening market for years or a falling market and I suspect the latter. The last GFC was 2008 and we will be heading for another recession soon 2018. When the tide turns it can go along way out and see who is swimming naked. A ban on foreign ownership and a cut back on immigration watch the headwinds come into play.

The first wave of "interest only loans" that were taken out in 2012 at the start of the bubble are now being switched by the banks to "principal and interest" as stated in the borrowers loan docs. Many borrwers will be surprised by the 30% increase in repayment amounts because most people take only 5 minutes to sign loan documents and most ignore the banks advice to seek independant legal advice before signing. 5 minutes to sign and 30 long years of debt slavery with no quality of life. Banks borrow on short terms and always sell LONG.

But at this stage I'm picking that most of these will be "investors". I think it is only more recently that first home buyers have got in on that lark....


Eco bird, FFS this bubble took 10 years to build, can you please show a little intelligence and patience? It could well deflate over many years. There may be a significant sharp correction if an external event occurs, or one may occur without such an event. We don’t know, nobody does. The point you seem to be endlessly making is that current sale prices are generally stable. The point others are making is that those sale prices only reflect the small proportion of homes presented for sale which are actually selling, and given the large number of properties not sold it is inevitable prices will fall in the near future. All these statements can be right. Your rants are painful to read. TTP at least performs a useful function as a village idiot, and TM2 is such a caricature that he also provides some amusement. Whereas with all due respect you just sound like a grumpy old man. So perhaps we can STFU until we see what actually happens? Because right now all your “told you so” statements really tell us nothing and are VERY tiresome.


I'm inclined to agree with your opening gambit there, but would say it's been 20 odd years in the making - I'm all for blaming National for everything if I can get away with it, but it's disingenuous to claim Labour were particularly effective, or effective in any way, during the Clark years.

Many of the "investors" on here have been in the game for 20+ years, they haven't seen anything but rainbows and unicorns for the most part, they're also incapable of seeing the damage they've done.

Fair comment


I fully agree. I absolutely was not happy with Labour's inaction, and I voted National because they campaigned on the issue and promised action. I voted against after John's first two terms because I saw they were simply denying the crisis exists and weren't going to take meaningful action after all, something fundamentally dishonest.

It will interesting to hear your thoughts after PT has had sufficient time to perform. I look at the issues in Canada and Australia and figure it was largely outside National’s control despite everyone pointing out how easy it is to fix. Given the cost to build, it will be interesting to see how Kiwibuild homes are received. The Millenials at my work talk about affording weatherboard homes in Ellerslie, not a prefab in Pokeno.


Outside of their control or laissez-faire attitude?

Stroke of a pen and housing is classed as sensitive - couldn't be done according to National.

Time will tell if that has any effect. It didn’t in Australia, neither did massive stamp duty transaction costs and capital gain taxes in that country. There is nowhere for Labour to hide here. The clear promise was homes for all and we are all watching.

I'd rather someone tried something than did nothing.

Actually Labour's housing policies are on their housing policy page:

Trying to say they promised "homes for all" is a reach we've discussed before. Otherwise, National's promise of "delivering for New Zealanders" was broken as they failed to deliver many things, including pizza.

Stamp duty is a good idea - why should we object to this? It could be used to replace some personal and company income taxes. Why would homeowners or investors object to it if is has not effect? Likewise with CGT.

"Delivering for New Zealanders" (terms and conditions apply*)

*To be considered a New Zealander, you must own a house or multiple houses, be aged 55 and over, preferably white and male.

Governments need regular income so why would you put your budget at the vagaries of sporadic property transfers? It would also devalue the property, unless it was in a FHB level house, if applied as in NSW. I’m all for taxes I don’t expect to pay myself but these would have more than just a monetary impact as Wellington rentals are apparently finding out. There will be many more impacts of this three ring circus cited in future economics lectures.

Per your previous post though, you cited these two as taxes that would not bring prices down. Thus, no great negative - but the positive opportunity to offset some income tax. Property transfers don't seem sporadic enough to not be able to reasonably estimate a typical level of activity.

I’m all for taxes I don’t expect to pay myself ...

Not meaning to be cheeky, but if too many of us think this way our society has a bit of a problem...

According to National, increasing supply is a necessary response to the housing crisis. Labour are at least making an effort to increase supply at a meaningful level.

Labour's initial measures to address some of the demand are a start, but per our discussion over the previous few days there's plenty more that could be done to reduce incentives for housing as a speculative investment and encourage more productive investment.

I also reckon David Seymour's idea of removing urban councils from the jurisdiction of the RMA is worth a look.

I expected action from National, not miracles. The ACT party encapsulated their disappointing failure to take any meaningful action:

"The current Government hasn't fixed it but, much worse, they've actively avoided trying to fix it with a series of paltry policies designed not to work.

"They thought that rising residential property values would help them electorally.

"Perhaps, given the average National MP owns 2.3 houses, they just didn't care. In fact, it would be amazing if such a group of people put in place a set of policies that reduced the value of those assets."

Exactly. With Auckland traffic what it is, who wants to live out in Franklin or Kumeu or Millwater and face daily commutes to and from downtown that could take goodness only knows how long? If you have reason to go in to town regularly it's no fun commuting from the outskirts. That's why I think a lot of the junk housing that soared closed to or even over a million dollars might not actually fall that much, if it is more centrally located, or at least not that far from downtown. The way Auckland traffic has become makes me think there is always going to be a premium on locations not too far from the CBD, even if the houses are old and haven't had much TLC since the day they were built.

I think thats great as long as no one wants to move out there, then hopefully property prices keep dropping.

I hear DGZ great. Not sure who from though.

Agree, in fact if under HC's 9 years, she had acted National's 9 years of in-action would not matter

To be fair, I don't think that investors who have been in the game for the past 5-20 years are to blame. It is more to do with an open unregulated market and speculators that have bid up the prices blindly and the banks have led these last lot into an early grave. I actually do feel sorry for many who have just simply overpaid in the expectation that prices will continue to rise. In reality it only takes a stroke of the pen from any government to change the game overnight and that is pretty much what Labour is doing right now. There will be many left high and dry and it is our banks that have allowed it. Time to pay the Piper.

lol, great to see that you too got the message Bobster...!

With all due respect, the brand of mouthwash you are currently using ATM seems to be quite ineffective so I suggest changing it ... and use better words in the language than offensive acronyms !

Yes, Myself and the Gents you mentioned are often saying "we told you so" and will keep doing that to provide balance and diversity of opinions and views on this forum (even you would agree that that is healthy). Obviously, you seem to be struggling with that ! -
So, maybe you need to take a deep breath and chill ... chances are that you may learn a thing or two from old grumpy people ... or Not !

I agree with you, there is no need for expletives, we are all here for healthy debate and sharing opinions

Ecobird, I will never tell you "I told you so".

And also, can you please leave out the “dog whistle” comments you make from time to time about good for nothing social welfare beneficiary tenants and their dogs, etc? It’s not very cool. It’s bad enough being a grumpy old man....being a grumpy old rascist, mmmm, not so good. Might have been ok when you grew up in the 50s, but we’ve really gone past that now. Sorry, had to say it.

you are making things up ... I never said anything about social beneficiaries tenants or any racist comment ...!! Get your facts right -- you seem to be confused !!

The market finally delivering, as expected; mostly a consequence of the previous governments tweaks to bank lending regimes and its woefully belated curbs on immigration. More suburbs will progressively become affordable. Twyford's virtue signalling ban on foreign buyers will be redundant in the face of plunging inwards migration. The state subsidised shuffling of construction resources into the coalition's kiwi build program, will further exacerbate the fall in AKL mid/lower quartile property values. With Twyford also intent on abolishing urban boundaries, the potential now exists for a gradual price collapse.

"The market finally delivering, as expected" "mostly a consequence of the previous governments (sic) tweaks"

Which one is it, is it the market delivering or govt intervention?

The market would have eventually delivered without intervention (as in CHCH) but the migration driven over stimulation of the AKL housing market hampered normal market response to a point where government intervention was required (and was triggered too late) if socially unacceptable consequences were to be avoided. It's not an either/or situation. Would have been better had I used 'partly' instead of 'mostly'.

christchurch had a population decrease at the same time as building ramped up, so you had a reduction in demand at the same time as an increase in supply.
Auckland has had the opposite situation , massive increase in demand whilst supply did not grow

In the two years following the 2010/2011 earthquakes, the overall population of Christchurch City decreased by 21,200 (-6 per cent).

The invisible jazz hands of the market.....

Is franklin really a part of Auckland??? What's next Huntly?? Or maybe go north all the way to whangarei

The great majority of adults that I know are looking to make a move in the property market in the short/medium term - either to buy a first home, trade up to something bigger/better, scale down (and/or relocate) for their senior years, or purchase an investment property.

I don't know anyone who's seeking to get out of property because they think it's become a poor investment and/or have become disillusioned with house ownership. Most are prudent enough and would only consider selling if they really had to - an unlikely scenario. People are realistic: they're prepared to "ride out" slow periods and recoup when times are more buoyant.

Of course, there are plenty of competing options for one's savings: bank deposits, managed funds (including KiwiSaver), shares, bonds, futures, bitcoin, collectable items and so forth. But as a recent item in reveals, property investment is what most people feel comfortable with - and is increasingly being favoured.


TTP, "the great majority of adults that I know are looking to make a move in the property market"

Haven't your parents bought a house - yet?

Are all these adult personalities contained within TTP? or are they real people who take advice from TTP? not sure whats worse.... lol

People take advice from TTP?

Of course not!

he's referring to the 'imaginary' adults.. as usual he is in an imaginary world..

A comfortable investment usually means lower returns.

Scaling down and/or relocating to me sound very much like they think "its a poor investment".

"would only consider selling if they really had to - an unlikely scenario."

- Yep no one moves to another country, no one gets into debt, no one gets divorced, no one down sizes, no one starts up a business, no one makes mistakes and makes poor investment decisions. Very unusual.

AND the biggest unexpected event of all is that NOBODY expects their bank to ask for more equity to be repaid when asset prices are falling and the banks are being squeezed to increase their capital ratios! And yes this has begun, although quietly, the banks are keeping some or all of the sales proceeds when an investor has sold up a property, and the banks are applying the sale proceeds to the entire portfolio and leaving the investor with no excess funds.

There’s nothing new there. I consult with business customers in financial difficulty. I deal with interested parties on their behalf i.e. the IRD and their bank(s). Where the finance facilities include covenants, then the customer has agreed to the Bank having a right of review of the conditions if covenants are breached. If the customer doesn’t read the requirements then they are naive. With property loans there are typically requirements to revalue the security at a specified interval, and the bank reserves the right to call for new valuations at its cost. Tied in with these are a covenant that the security value will cover the loan facilities to a certain level. If it falls below that, you either add more security or pay down facilities to correct the breach. The banks reserve the right to apply full sale proceeds against debt. As the securities are usually treated as a pool, then if you are in trouble you can expect them to protect their position by applying full sale proceeds of any property. In my experience banks are easy to deal with. Talk to them, find out what’s expected, agree and keep your word.

Btw expect moves to protect customers against banks. WP has a review planned and we may follow Aussies where a review is looking to remove covenants for customers with lending under a certain level. You can only default by not paying.

As I understand business customers have debt covenants, not sure about retail customers.

There are 2 categories of retail customers with mortgages:
1) owner-occupiers
2) non owner occupiers

I imagine that the banks monitor large exposures, particularly in the latter retail customer category - non owner occupiers. With respect to the second category, do the banks demand an equity payment if the LVR is approaching 100% even though the debt payments are all current?

I hear many stories how property investors have structured their financial affairs to remain being classified by banks as a retail customer (and not business customer) in order to avoid the debt covenants and more costly reporting requirements.

I don’t take on retail customers. I have heard that the Reserve Bank was looking at classifying retail customers with a certain number of properties as business customers. I don’t know how many properties are needed for that and if banks would apply business conditions. The main point for replying to TainuiBabe is that there is nothing new in the approach to applying sale proceeds, especially if there are existing concerns. The banks protect themselves quickly when they feel a customer is having them on and their documentation provides the means.

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