Given affordability is back in the headlines I thought it might be worthwhile taking a look at the actual data.1/10
We @CoreLogicNZ launched the most up-to-date and comprehensive housing affordability report back in September 2020 which analysed four measures of affordability, as too often the sole measure looked at is house price to income ratio. 2/10
This is a valid measure to understand how much debt someone must take on to enter the market, but cannot be viewed in isolation. 3/10
In the report we also track:
The share of household income required to service an 80% loan to value (LVR) mortgage (to reflect affordability for current owners) 4/10
The number of years it takes to save a 20% deposit, assuming 15% of income is saved (to reflect how hard it is to get into the market), and
The proportion of household income required to pay the rent (to further reflect situation of prospective home owners). 5/10
The greatest insight from the latest figures is that the only measure to improve over the last year is the share of income required to pay a mortgage - so affordability for current owners has improved. 6/10
Meanwhile the other three measures have deteriorated. It takes longer to save a deposit, it costs more to rent and it takes a greater multiple of your income to purchase a property. 7/10
The full report from Q2, including detail for every single TA in the country available below. Next report will be published in late Feb for Q4 2020 figures, and we have Q3 figures available upon request. 9/10
https://www.corelogic.co.nz/news/new-corelogic-housing-affordability-report-finds-boost-falling-interest-rates
And @KDavidson_CL wrote about the updated Q3 figures at the start of last month. 10/10 https://www.corelogic.co.nz/news/new-affordability-measures-show-why-property-has-got-political-so-fast
You can follow @NickGoodall_CL.
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