Interest.co.nz Home Loan Affordability Report says the slide in both interest rates and lower quartile house prices means Auckland is now considered affordable for first home buyers

Interest.co.nz Home Loan Affordability Report says the slide in both interest rates and lower quartile house prices means Auckland is now considered affordable for first home buyers

By Greg Ninness

Housing in Auckland is once again affordable for typical first home buyers, according to interest.co.nz's Home Loan Affordability Reports for January.

The return to affordability in Auckland was driven by a fall in the Real Estate Institute of New Zealand's lower quartile dwelling price for the region, which dropped to $650,000 in January from $675,000 in December, and a decline in mortgage interest rates.

The reports show that the average of the two year fixed rates offered by the major banks dropped to 4.25% in January from 4.33% in December.

That was the second lowest rate recorded by the reports since interest.co.nz started collecting the data at the start of 2002.

The all-time low during that period was 4.23% in October last year.

The reports calculate that the combination of lower interest rates and the drop in the lower quartile selling prices would have reduced the mortgage payments on a lower quartile-priced home in Auckland to $651.20 a week in January compared to $686.34 a week for typical first home buyers in December, a saving of $35.14 a week.

That’s based on the median after-tax income of a couple where both are aged 25-29 and working full time, and the mortgage payments would have taken up 39.7% of their take home pay, with anything under 40% considered affordable.

The last time mortgage payments on a lower quartile-priced home in Auckland were considered affordable for first home buyers was in June 2016.

The decline in prices in Auckland was region-wide, with all districts from Rodney in the north to Franklin in the south posting falls in the lower quartile price in January compared to December, with a particularly big fall in west Auckland where it fell from $702,000 in December to $652,000 in January.

Those price falls meant that housing is now considered affordable for typical first home buyers in Waitakere, Manukau, Papakura and Franklin, but they would still likely struggle to find something they could afford in Rodney, the North Shore and the central Auckland suburbs.

However it is probably too soon to break out the Champagne and declare Auckland's housing affordability dragon slain.

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

That’s because lower quartile prices generally take a fall in January and then slowly rise up again as the market gets busier over the following few months.

If the market follows the usual seasonal trend in the first half of this year, prices could well push back up above affordable levels over the next few months.

And although Auckland’s lower quartile price dropped significantly from $675,000 in December to $650,000 in January, it only fell back to where it was in January 2018 ($650,000) and January 2017 ($651,800).

That suggests a flattening of prices at the lower end of the Auckland market over the last couple of years rather than a major correction, but first home buyers could take heart from the fact that at least prices are not still going up.

The lower quartile price for the whole of New Zealand was $386,000 in January compared to $390,000 in December, with lower quartile prices falling in six regions– Auckland, Bay of Plenty, Hawke's Bay, Taranaki, Wellington, and Canterbury, rising in five – Northland, Manawatu/Whanganui, Nelson/Marlborough, Otago and Southland, while the lower quartile price was unchanged from December to January in the Waikato.

Those trends also suggest more of a flattening rather than a major correction in prices.

Beyond Auckland, housing remains well within affordable limits for typical first home buyers in all districts except Queenstown.

Queenstown’s lower quartile price took a massive hit last month, dropping from $820,000 in December to $715,495 in January, although monthly price movements in the town can be volatile.

However it was the still the second least affordable place in the entire country for typical first home buyers after Auckland’s North Shore.

Outside of Auckland and Queenstown, housing remains affordable for typical first home buyers in all other districts.

*This article was first published in our email for paying subscribers early on Thursday morning. See here for more details and how to subscribe.

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98 Comments

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16
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$650000 is not what I call affordable, even with mortgages so low. $400000 that is what I call affordable

19
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Staggering isn't it?

One million bucks used to be first division lotto, now people are taking on that much debt for a so/so Auckland property.

The prices are relative arent they oreo. 400 thousand sounds cheap compared to 650 thousand. 20 years ago you wouldn't have said as high as 400k and in 20 years time you wont say a figure that is as low as 400k. And people in tauranga and whangarei would say that 400k is too high. If you are serious about buying a first home you will find the home offering the best value for price and features that you can find in an area you are happy with and go buy it. I know you will say that tomorrow and the day after that, home prices will be cheaper. Even the socialist labour party and communist green party know that is not the case, which is why they are introducing Capital Gains Tax

11
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Without the large immigration and the Chinese using our property market as a safe heaven for their dirty money there wouldn't of been a price hike as much as what we saw the last 9 years. Without that artificial prop up of the economy by Comrade Key and his National mates New Zealand would of been in a recession in 2009 and I really don't think that prices would of gone up that quickly. Now average New Zealanders pay for those decisions to sell off the country 9 years ago

Why target John Key when there were others before him that sat on their hands. In early to mid 2000s Helen oracle Clark could have brought in cgt overnight with the support of the communist green party but she didnt, why not? Because it would have been political suicide for her at the 2005 election. Don Brash would have been elected and changed the course of history.

Jeepers Houseworks! All right sure whatever you say! Don Brash
I bet you can't wait for Collins to be leading the National NZCCP

I am just saying that Helen helengrad Clark didnt have the balls to intro capital gains even though she could have done it because she knew what it meant that labour would have been voted out. You may not like brash but in 2005 he ran very close campaign which if he had won the last 10 to 15 years would now have looked very very different. Probably no key or ardern because others may have taken the role who knows. I dont think jacinda has the balls to bring in cgt, labour already blinked at last election

... my question is : Why is this government avidly looking for new ways to tax the economy .... rather than review how they spend the $ 80 billion they remove from taxpayers annually ...

A billion $ plus for accommodation supplements .. .. $ 4 or 5 billion for WFF .... interest free student loans .... fees free for first year tertiary education ... there's more fat there in unnecessary payments , than in the total amount that a CGT is designed to pull in ...

... if Don Brash had won the 2005 election , there'd be tax cuts across the board for all NZ workers , no WFF , and none of this blathering on about " fairness " ... we'd be in that space already ..

Is there enough fat in unnecessary payments to cover the increase non-means tested superannuation payments that’ll be handed out to those who will also bank huge capital gains tax free? For once in their life they might need to put a little back in to the cup.

... there's probably enough fat to adopt Mad Catter Gareth Morgan's plan for a UBI ... thereby cutting out the IRD ... as opposed to Sir Micky's grand CGT plan , which will increase the spending on public serpents enormously ...

Anyone know what Morgan thinks of the tax working group's findings ... that ought to be a highly colourful expletive laden interview ... hey Gareth , is Sir Micky on the money or not ?

Wrong question.

The word is 'different', not 'new'. New is a word which indicates a propagandist with a pre-set view-point. I happen to think this is a pointless move given where we are headed - and that the biggest need is to eliminate interest in a finite world.

But I still tire of he-said she-said smallness of discussion. Both your houses are a mile from where they need to be, nd show no inclination of intellectual ability to get there. We can help that, by raising the level of the discussion.

I agree with you on that one, Labour doesn't have any balls, they too worried to loose and that is going to bite them down the line.
I am still waiting with a party and a leader that has a 30 years vision/plan for our country with no strings attached to either corporate or unions. Someone that will do what is necessary for New Zealand as a whole

23
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Oh no it isn’t!

House prices have a long way to fall before they become affordable

Out of interest what is the affordability when we go back to the old interest.co.nz affordability calc that used a shorter mortgage term? (Can't remember whether it went from 20 to 25 years, or from 25 to 30 years for the calc.)

13
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More manageable yes. Affordable NO!!. If you want affordable then just wait. Auckland prices will continue to decline until the banks and government join forces with some unnatural acts to arrest the fall.

$650k Mortgage - can a 35 -45 year old get that paid off by retirement?
Is that even affordable for 2 or 1.5 middle incomes?

$650k house, so say a $600k mortgage and a 50k deposit. $853/week repayments for a 20year mortgage at 4.2%. So more than all of one median income (~$1000/wee before tax) is going to be taken up paying the mortgage, rates, insurance etc.

I think you'd struggle on 1.5 median incomes, at least until wage inflation starts helping. Would probably have to take a 30 year mortgage (if the bank lets you) and lift repayments as your wages rise to get it paid off in 20 years. Throw a couple of kids into the mix.. and yeah, you're screwed.

That is misleading. A 35 year old couple with only 50K have no excuses, they have only themselves to blame, they would also have a big penalty rate and would struggle to get discounts or special rates so would pay a rate more like 5.7%. A diligent 35 year old couple will have a 20% deposit and would use a 30 year loan term. They would have a net household income of $1,425 per week. The $520,000 loan would cost them $585 per week. That's certainly workable.
The way you present data is very slanted.
Your example seeks to claim a grossly negligent couple should some how be expected to afford a home in a major city; that's ridiculous.

So a couple living and working in Auckland shouldn't actually be able to afford a house in Auckland without living on bread and water, unless they did everything right and made no mistakes along the way?

God help they got involved with the wrong person.. or made a poor initial choice of career and decided to go re-train for something more suitable. Better not try to start a business and fail either.. just be a good wage slave, eat two minute noodles and sew your own clothes like a good corporate slave.

And yeah, if you are anywhere below median income.. apparently you should just go curl up and die.

Edit, and the numbers i worked out were for a 45yo couple, the upper end of MBs question, hence the 20y mortgage.

There is nothing 'bread and water' about it. Starting at age 22 on 40k and 25k with 3% wage growth they would have the deposit needed from 8% kiwisaver schemes alone. It requires financial stupidity to only have 50k by age 35.
If you only have 50K by age 45 then something has gone catastrophically wrong, if you took a swing and missed, that was your call but choices come with consequences and always have done.

20 year loan term...even the yuppies and boomers in their day couldn't afford that

bullshit

So your boomer mother had her mortgage payments calculated over 20 years? That's bullsh*t

Right, but 35-45 year old should have more that $50K saved. They're probably got that much in Kiwisaver alone. Maybe not the 35yo, but 45yo yes.

Also, median weekly earnings for Aucklanders 35-45 is $1182 so a bit higher than that example.

fair enough, Still, that would result in one median income about covering the mortgage rates etc after tax.

I think it's sad that people need two incomes to buy a house these days. I plan to buy a house on one income, which means I need to be aggressive in my career advancement, frugal, and not buy more house than I can afford.
It's back to the 1950s for me.

If you search TradeMe for Auckland houses, units and townhouses between 300K and 600k you get over a thousand listings.

30
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Cool, now go take out all the leasehold crap and leaky rot-boxes and come back with a real number.

Edit: also filter out Wellsford, Tuakau and other bits that trademe calls Auckland but really aren't what people think of as Auckland. I figure you'll get down to about 400, and mostly one bedroom units?

...and ZS you wouldn't touch any of them with a barge pole.

According to Corelogic,, last year 856000 was the average for an Auckland first home buyer .Given those numbers, the lower quartile and affordability metrics have almost no relevance.

11
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People shouldn't be paying more than 33% of their net income for housing. I know you set affordable at 40% but that's too high as these costs are leaving people with little or no money to spare and no way to get ahead.

28% is the international benchmark for housing costs (including rates, insurance, maintenance etc)
https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp

You need to adjust it for culture/behavior/preferences. If your home is more important to you, larger, spend more time entertaining at home etc, then it is reasonable to spend much more than that.

Its never been 28% in New Zealand in my lifetime. I was 20 years of age and the bank limit on lending was 33% and it was not enough to buy a house on a single income. 40% of you income on a mortgage is not to high, if you think it is then your never going to get into a house but keep enjoying your smashed avo and overseas holidays and new cars and keep telling yourself you cannot afford a house. You can go to 60% of your income if your primary objective is home ownership.You have to be prepared to compromise or its not going to happen.

The traditional threshold for affordability was 33% of gross income, but that made no allowance for the effect that changes in tax rates (up or down) had on affordability, which is why we use 40% of net income as the threshold.

40% is too high and does not account for student loans (which also extends the deposit saving period by a couple of years). Then add in rates, insurance and bills and you are looking at closer to 55%. Then they have a baby...

@kiwimm you are only looking at downside risks. There are many upsides to include as mitigating factors like promotions and wage gains. 40% at a young age is certainly reasonable. Life may be a bit tight but that has always been a trade off for home ownership in NZ. Although things are tougher today than usual it is not as unworkable as people explete..

With the average FHB age in Auckland now 35, they have their biggest % payrises behind them

You dont need big pay rises, just a lot of little ones over a long period of time is a very potent force. Throw some numbers in excel and youl see that modest pay rises of even 3% are a potent mitigant if inflation is even 2%. To say their biggest pay rises are in the past belies the potency of incremental compounding advances in income over long period of time.

#mortgageslaves

One of the reasons for the rule being set lower is for debt servicing purposes. To keep the math simple if your mortgage payment doubled due to whatever reasons, interest rates etc. Then someone with a 40% mortgage would need to pay 80% of their income, 33% doubling to 66% is not as bad but still serious. The 28% suggested above would lead to a 56% payment.

In short anyone buying at 40% is going to be more vulnerable to payment increases. It doesn't take much for affordable to change to unaffordable.

Although we spare a thought for Australians that have bought a house with 50-60% of their income going out in mortgage payments, and now experiencing refinancing issues.

e: note that for personal finance I always apply net income as that is what people are actually spending. The rule being 33% housing, 33% other costs, and 33% disposable. In the worst case doubling it eats all the disposable but you aren't illiquid.

You cant use a rule of thumb to dictate what is affordable in reality. You need to check servicing and use higher interest rates than today and realistic estimates of a bread and butter budget, which is exactly how it is actually done. Saying things like payments doubling is hilariously crude.

That is the point. The 40% affordability measure is crude, and the doubling is for the purpose of communicating risk to people. When net cash flow dries up people find themselves in financial trouble.

Anyway the whole point was to indicate that the claim that Auckland housing is affordable is not really accurate. The prices need to fall a lot further for that.

Except the evidence is that in some respects it is now affordable so youd have to put 'a lot' in to context because if it needs to fall 10% thats hardly a lot, and if it needs to fall 50% thats absurd. A 30% fall gives you the 30% of income figure for the median household but as i point out, that 30% is not a reasonable way to assess affordability.

sorry Greg, there's no way these prices can be considered 'affordable' for first home buyers.

Only 5500 properties sold in Auckland last year were to First Home buyers. Something wrong with those affordability numbers.

Sad to see this article greeted with scorn.
Buying one’s first home has never been easy - ever.
Too much focus on price and I suspect that this is being used as an excuse to avoid making the commitment or effort.
A decade back interest rates were in the 8 to 10 percent and many will remember the days of 20 to 25%. So the current cost of mortgages make the size of them effectively half what they were.
One of the main reasons house prices have risen over the past decade is the “cheap” interest rates.
To be blunt, looking back at my generation - and especially my parents generation - with current interest rates look to be around for a while and likelihood of increasing wages it is no different. There are a number of people who if they are really serious about homeownership they need to stop whinging and suck it up - and I feel that those who do use the excuse of a bubble burst so so because they don’t have either the ability or balls to make a commitment. It is a false and pathetic excuse to use with their mates and families for not making a commitment.
Don’t put your life on hold by using that pathetic excuse of housing market bubble burst. This view is dreamers who like to sound off - I have far more respect for the view of commentators such as Adrian Orr who sees a flat market rather than these keyboard warriors seeking a false sense of self importance. Your bank is not going to lend unless it is confident that you aren’t going to have issues even if there is some correction to the market; they have a far more reliable and educated understanding than these faceless keyboard warriors.
I expect a triaide of negative comments to this view, but I see denial as being those who are losers.
And I am currently in a good mood!

19
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Did you hear Amy Adams squirm on RNZ this morning. She was fighting the no capital gains corner, and then the interviewer asked her about her 8 properties...

Sure it'll be up as a podcast later, it was hilarious to listen to.

yes Nic. I went to the podcast because it was recommended to me as Amy staring Guyon down. I heard no squirming. She fronted the questions straightforwardly with no embarrassment.
Strange isn't it. We both heard the same interview and heard quite different things.

13
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I find Amy insufferable, and I've typically supported National.

She has her head firmly planted in the sand on a lot of issues and is representative of the worst, unelectable elements of National.

Amy ran circles around Nash and Robertson try watching their press conference if you want a real laugh. Nash owns properties, Robertson none that I know of maybe thats why he is so in favour of the envy tax. Your arguement works both ways in relation to self interest Nic

Your arguement works both ways in relation to self interest Nic

I quite agree. Guyon should show consistency rather than question the motives of those he disagrees with by interrogating their financial position.

Link to the podcast, it's quite amusing.
https://www.radionz.co.nz/audio/player?audio_id=2018683615

The whole thing is good but starting at about 4 minutes it get's really good.

Taubin

Agree that the podcast is interesting. Its very clear that politicians often gloss over their own self-serving interests as being for the public good.

Guyon did a good job in trying to flip over the cover on Amy Adams' property portfolio.

Nothing wrong, she keeps saying repeatedly, in working hard & having property investments.And in her warped thinking, any gains should be tax-free.

Try telling it to the primary school kid who delivers fliers to letter boxes for peanut wages & gets smacked with tax on his meager earnings.

Or perhaps he gets taxed because he is not working hard enough??

I agree with you 100% printer8 but your wasting your time voicing your opinion on here. Commitment is the biggest problem, I know because it was a massive hurdle for me to overcome. Your signing up for something for the next 20 years and many people of this generation simply cannot do it.

Nobody is complaining about mortgage affordability, the record low interest rates have driven up house prices and the corresponding deposit requirement that needs to be saved while the return on those savings is a pittance. The more time one spends saving for a deposit, the more time they spend paying market rent (dead money) if they cannot live at home.

The days of 20 - 25% interest rates? You mean from 1985 to 1987? What was wage inflation like? What was the 6 month TD rate like when saving for a deposit?
https://teara.govt.nz/en/graph/23100/interest-rates-1966-2008

Don't mistake my comment as making excuses, I relocated to the North Island 18 months ago and bought my First Home. It's a 3 hour a day commute. Fortunately I have an employer that's flexible with my working hours.

Hi Nzdan
What wage inflation?
Despite onset of possible dementia, I think I recall being on a fixed term employment contract and then Muldoon hit us with a wage freeze.
Fortunately I only faced 15% but my (to be) second wife was on 22.5% as a solo mother with two children and a single income - there are always others who have it worse.
I think I can understand current FHB frustrations. I do hope that they get to achieve what is part of our NZ traditional cultural aspirations - homeownership and all the intrinsic and economic advantages associated with that.

NZDan
It is great to hear that you have got into your first home - well done and in the long term I am sure that you won’t ever regret that.
I note your frustration of a 3 hour daily commute. But you will be fully aware that your first home is a step on the property ladder and in the not too distant future you will be looking at stepping up and most likely closer to work. One’s first home is often just a first step and often it involves a compromise due to affordability with features one doesn’t want long term. My first house was in Mangarer East (a better part!) and within a couple of years I sold and bought a lifestyle farm.

pd

Why did Muldoon need to initiate a wage freeze (that lasted all of 2 years)? Could have something to do with rampant wage inflation because why else would you need to freeze something?

Indeed, there's no question that facts and maths are very different now. People will likely end up paying a far greater amount of their overall life earnings, and will have to earn more over longer periods of time.

Every financial expert I've talked to has acknowledged it's a much harder picture today that in days past. That in no way suggests that people did not work hard in the past, but they were certainly helped in their turn by government supply efforts and legislation that in its time served to raise NZ's home ownership rate.

There simply is no (sensible) ignoring the fact that home ownership rates have been declining for years as affordability measured on the global scale has been getting worse. We can pretend twas ever thus and ever thus shall be, but we're better off facing facts and reality.

It behooves young people to keep pressure on legislators to legislate in ways that will help more NZers into home ownership over the coming decades, rather than simply encouraging the current model. Affordability is heading in the right direction, but it's for the benefit of more Kiwis that they keep the pressure on politicians to improve housing in this country.

There is a cohort who held off buying a house between 2009 and 2014 as they were so bearish following the GFC. One of the characteristics of this cohort is always calling the top and the bubble, they are well represented here. It will go down as the single worst financial decision anyone has ever made.

It will go down as the single worst financial decision anyone has ever made.

Or possibly the single best financial decision they ever made.

... true ... the financial world is now awash with much more debt than before the GFC ....

And no one , or very few , could credibly have forecast that the entire USA housing market would crash by 50 % in a single year ...

.... luckily for us ... that sort of thing never happens here ... never ...

You are forgetting that interest rates are only as low as they are due to the after effects of the global financial crisis. So at some stage they are likely to return to those ten percent levels. Then will people be able to afford that million dollar shack? Cheap credit has a cost down the track, as it cause bubbles, especially in property when there is a lack of supply, as occurred in Auckkand, and somewhat in other centres.

Nah come on Rob, interest rates will stay this low forever. If we do hit another financial crisis, the RBNZ will just drop the OCR another 600 basis points (it worked last time right?), interest rates will go negative and then all the people with million dollar mortgages will get paid for having a mortgage.

House prices will go through the stratosphere as everyone clambers over each other to get the biggest mortgage they can, but there will be mass homelessness as landlords leave their rentals empty.

Printer8 Kind of agree and remember 8-10% and 25% under Muldoon. However If I was a fhb I would wait ab bit longer for some sort of asset reset otherwise there is a real possibility of being underwater if we follow the trend of Sydney and Melbourne.

Asset holders have to accept that there needs to be some meat on the bone for the next owner or they will continue to vote with their feet.

Houses are extremely affordable.First Home Buyers are certainly buying in ChCh as they know that prices are
Going to increase.
When you can but with a 6% return minimum then it is cheaper than renting.
You can moan as much as you li,e but it wou t get you anywhere.
Forget about the CGT. Because it won’t be coming in, end of story!
The ri gfencing of rental losses is a bigger worry for Auckland investors and negatively geared investors, and it is going to seriously affect tradespeople as well!
Clueless government!

An investor who wants to get good tenants has to spend on maintenance, repairs and improvements unfortunately. The stupid govt landlord HNZ who have the worst presented properties will be shortchanging tradies.

Houses booming (oblivious to oversupply) in chch while commercial space is increasingly vacant. That would be a neat trick.

10
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Hi Greg
A few questions to ask about the auction results page - https://www.interest.co.nz/property/residential-auction-results?&page=2
1) Where have all the Barfoot results gone?
2) Why are properties being listed as Auctions if they were sold prior? And is there a way of checking when the date of the Auction was actually supposed to have been held? Kind of clouds the numbers.
3) I see the Auctions results page now features properties from Christchurch, which is great, when did that change as I don't remember them from last year?
4) Is there any way interest could provide the GV figures on the houses that get passed in. Would be nice to get an idea
5) Also why are the GV numbers not included for all the sales, it looks like they only appear when the auction price is near or above, but with so many sales now below GV it would be helpful for first home buyers to see this information.

many thanks

Nic

Hi Nic, I'm not sure what you mean about the Barfoot auctions. We are posting their results as usual and the resuslts of all of their auctions from last week are available in our results.

Of the auctions we monitor we always note whether a propery was sold or not sold, and that includes properties sold under the hammer, prior to auction or immediately post auction. It will usually say if a property was sold prior or post auction.

We do not intend to put RVs on properties that are not sold.

The only reason we do not include RVs for properties that are sold is that we cannot match the address with the RV database with sufficient certainty. There can be several reasons for this, but it has nothing to do with whether the selling price was above or below the RV, which is quite an offensive assertion for you to make.

 

I’ve noticed that with a lot of the apartments, a search on QV take you to a map of the general area. Tweaking the numbers to just a basic street address doesn’t seem to help either.

GV's have been out of existence for a long time

Could you be more of an anal pedant?

German Swiss, I reckon.

The Germans I know would be rather offended by that.

... my Swiss friends in Basel would likewise , be offended by that !

Can we blame the Dutch for this one then?

... nah ... play it safe , and follow Trumpy's lead .... blame the Mexicans ....

No way Jose!

... it'll just take $ 5 billion to keep them out ..... we'll construct a sea-wall ...

The article tells about "Home Loan Affordability Reports" not the "Home Affordability Reports"

I guess the country is so exceptional that it has it's own determination on what is affordable.

12
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Congratulations - you can afford a large mortgage.
Kind regards, An Austrailian Bank

you are in a possession of the great "Borrowing Power" :) I like this term they 've been using for a while, the "Borrowing Power", means several things at a time :
1) you are quite powerful that you can borrow from us that much :)
2) you have to borrow from us because you are too poor to buy anything without borrowing
3) add yours...

This use of the word "affordable" for anything in the Auckland housing market is just BS .... it's "affordable" if you want to be a 30 year "mortgage slave" for the rest of your working life !... while at the same time said by people that already have their own property (or properties !) and have a "very vested" interest in these current values being sustained.

My advice for any first home buyer in Auckland is to watch the Sydney/Melbourne market .....as what happens there, will happen here ....and always remember the BANKSTERS and their shareholders are running the PPP (property ponzi party) and from the Royal Commission in Australia, just ask a Mr Thorburn or a Dr Henry :)

Hi crazy horse, is it 6 month time frame or shorter for Auckland to drop the same as Sydney? Btw even the socialist labour party and communist green know that property values will be increasing higher and higher otherwise why introduce capital gains tax

Lets correct this!
Nothing in Auckland is affordable! The only thing that affordable is a one way ticket to get out..

Affordable?? Who are you working for? The banking cartel? What mathematically incorrect propaganda!

Interest team....out of interest:

a) what do you believe the average interest rate is over the term of a home loan historically (say last 100 years).
b) do you think this figure should be applied to home loan affordability reports?
c) is it correct to assume interest rates will continue to be at historic lows for the next 30 year term of a home loan?
d) should alternative options be provided in home loan affordability reports which say, hey if we had interest rates in 5 years time of 5% or 10%, here's how affordable these houses really are for first home buyers?

Imagine if going forward every couple of years the interest rate notches up just enough so that the interest dollar portion of your payments reverts back the peak amount from the very first payment.

Instead of reducing interest/increasing principal payments it’d be effectively fixed interest/increasing principal.

This definition of affordability is just laughable. Please take a step back and think from a family perspective and not just make pointless assumptions that are not realistic. There are low wages, people back to study in their 30s and all kinds of people and situations, not everything is the picture you draw in that biased report.

Shaking my head over here, thats an enormous number...where do we go from here?

Auckland is now affordable for first home buyers - Yea Right !!!

But the regions are more affordable than Auckland
http://nzh.tw/12206571

That’s what we did. Their story is very similar to ours.