Mortgages in New Zealand were the most affordable in seven years in January, as low interest rates boosted the purchasing power of home buyers and home prices declined, said a report.
Affordability reached its highest levels since February 2004, aided by a slight increase in weekly wages and the benefits of the income tax cuts in 2010 for those with higher incomes, according to the recent Roost Home Loan Affordability report.
The proportion of a single median after-tax income required to service an 80 percent mortgage on a median-price home has improved to 51.7 percent from 53.8 percent.
Mortgage payments in the Wellington region took up 52 percent of the median weekly take-home pay, against 61.8 percent in 2010 and 81 percent in January 2008.
The most affordable mortgages were in the Hutt Valley, taking up 45.7 percent of take-home pay, while the Kapiti Coast had less affordable mortgages, at 58.1 percent of take-home pay.
The national median home price dropped to S$340,000 last month, against S$352,000 in December. Affordability has been improving since end-2009.
The most expensive place in New Zealand is Queenstown, while the cheapest was Whanganui.