Housing costs make up the single biggest spend category for many people, so housing affordability is always an important consideration when trying to get in top of your finances and grow your wealth.
It’s also interesting to see how affordability is trending over time. Is it on an upwards trend? Downwards trend? Or is it a bit up and down? How does current affordability measure up against historical periods? Are you paying more than the average?
All these questions, if answered correctly, can help you determine if now is a good time to buy a house for you.
Thankfully for you, I have provided a new resource free of charge (second calculator on the linked page) for you to look at current and historical affordability in 10 different regions around the country, plus the nationwide average.
I provide the current and historical affordability data using five different measures:
1/. Monthly mortgage repayments
2/. How large your house deposit needs to be
3/. How much house deposit is required as a percentage of income
4/. How much houses cost relative to income
5/. How much monthly mortgage repayments are as a percentage of income
You can see how each measure of affordability tracks in any of the 10 regions across the country since 2017.
For the national averages, 2024 mortgage payments took up 44% of the median household GROSS income. The 8 year average has been 38%. 2023 was 50%. Much more affordable compared to the previous year (2023) but still higher than average. For Northland and Bay of Plenty, 2024 mortgage payments took up 57% and 52% of income respectively. Much of the lower north island and south island faring better at a little under 40%.
You can also see that 2024 house prices and house deposits as a multiple of income were lower than average for most regions. Auckland significantly less. Prices only equal to or higher than average in Waikato, Taranaki, Canterbury and Southland. The time it takes to save for a deposit down on previous years.
Across the board, affordability not quite at 2021 levels, but as good as or better than 2022 and later in many instances. Will be interesting to see what results the 2025 data brings us. With mortgage rates continuing to decrease and incomes increasing in 2025, there will no doubt be further improvement to housing affordability data for 2025.
You can read notes on how I collated the data and what assumptions are used on the linked calculator page above.
I will try and update this resource every year when the annual median household income data becomes available, which is typically mid year some time.
In addition to the data, there is a section where you can even enter your own personal housing information (price, location and mortgage rate) and see how the property you are looking at stacks up against the affordability measures used above.
If you need help with any financial decisions, then get in touch today.
The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here