Where are the most affordable houses in New Zealand?

In great news for first time buyers looking to cash in on the booming residential property investment market in New Zealand, the latest AMP360 Home Loan Affordability Report shows that home loans across the country were more affordable in January, improving 4 per cent over the course of the month.

The report highlights the strength of the housing market over the past few years. A typical New Zealand home buyer now needs 60.3 per cent of a single median income to pay the mortgage, dropping from 64.4 per cent in December. Median house prices declined slightly in January, dropping from $450,000 in December to $426,000 in January.

Investors will relish the astronomical rises – after all, it improves the opportunities for capital gains – and rate cuts have offered some relief from the scalding prices. This latest result is still a vast improvement on December 2008. At the height of the housing boom buyers needed an eye-watering 83.4 per cent of their income to pay off a mortgage. 

The report also shared some interesting insights into where buyers might find a bargain. Affordability in Central Auckland and the North Shore declined in January, with mortgage repayments taking 94.9 per cent and 100.8 per cent of incomes respectively – but things looked a bit more promising further afield.

Manukau and Waitakere both recorded a jump in affordability in January, while those looking for residential investment property in Hamilton could also be pleasantly surprised. The average buyer in Hamilton needed 53.2 per cent of their income to pay off their home loan. 

Affordability is a big barrier in many cases, but broadening your investment horizons can have great results. Mortgage repayments are a big factor when you want to make the most of your investment property, so if you want to expand your profits, consider affordable areas like Hamilton. 

In any case, it pays to get reliable property investment advice before you commit. A Goodlife Authorised Financial Adviser can help you weigh up the risks and benefits of investing in a particular area, based on your distinct financial situation. 

Here's to your financial independence!

Daniel Carney
Authorised Financial Adviser / Investment Property Expert

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info@goodlifeadvice.co.nz