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Renting still cheaper than first homes

NZ Newswire logoNZ Newswire 10/05/2017

There's good news for Kiwis renting while they save for their first home deposit - rental prices across the country are becoming more affordable.

But on the flip side, a new measure of housing affordability launched by the Ministry of Business, Innovation and Employment showed first homebuyers are consistently worse off.

The new measure has been in the works for five years and allows data to be separated by renters, first homebuyers and by region.

But the first set, released on Wednesday, only includes data between 2003 and mid-2015.

The first set of figures has revealed both experienced rises in unaffordability as a result of the 2008-09 global financial crisis.

"Aspiring first homebuyers saw affordability stabilise almost immediately, and housing affordability for this population improved in 2009," the report found.

"By contrast, renting households experienced worsening affordability from 2009, which lasted until 2011."

Affordability for renters has been improving since early 2013 and has been consistently ahead of affordability for first homebuyers.

As far as the regions go, affordability in Auckland, Wellington and Canterbury stuck to the national trend until 2011.

In Auckland affordability rose above the national benchmark in mid-2012, at the same time as property in Canterbury became more affordable for first homebuyers.

From being the most unaffordable of the three major regions for renters in 2011 Canterbury became the most affordable in early 2015.

Building and Construction Minister Nick Smith said accessing data at a local council level would help identify challenges in specific housing markets.

"What I'm encouraged by is in a market like Christchurch housing affordability has improved very considerably as a consequence of measures to free up the supply of land," he said.

"It provides a clear signal of the sorts of measures that will work in other markets, like Auckland."

The report will be published quarterly based on government and private sector data.

MOST AFFORDABLE FOR FIRST HOMEBUYERS

1. West Coast

2. Taranaki

3. Southland

MOST UNAFFORDABLE FOR FIRST HOMEBUYERS

1. Hawkes Bay

2. Auckland

3. Nelson

MOST AFFORDABLE FOR RENTERS

1. Canterbury

2. Wellington

3. Auckland

MOST UNAFFORDABLE FOR RENTERS

1. Hawkes Bay

2. Northland

3. Otago

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