House affordability has improved slightly in Hawke's Bay over the past quarter thanks to decreasing house prices, the latest Massey University Home Affordability Report shows.
Covering March to June this year, the report showed Hawke's Bay and Central Otago Lakes bucked the trend of other regions with a major quarterly fall in median house-price growth - down 7 per cent or $30,000 in Hawke's Bay.
The report author, Associate Professor Dr Graham Squires, said that in assessing affordability the Massey Home Affordability Index took into account the variables of interest rates, wages, and house prices.
"As interest rates and wages are not moving significantly attention turns to house prices, where this quarter we have seen a $30,000 decrease in the median house price in Hawke's Bay.
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"This is a significant fall, which is interesting, as we have seen a gradual incline in house values over the last two years."
He said that over the past two years prices had been on an upward trajectory from an average of $330,000 to $430,000, and it was uncertain whether this quarter's decline was a new trend or just a "blip".
Harcourts Hawke's Bay managing director Kaine Wilson said the real estate agency had also seen the 7 per cent drop in median house price for the quarter - similar to what had occurred in the same quarter last year.
"Last year it quickly returned in the spring quarter and I suspect the same is in front of us now."
Last spring there were more high-end property sales for Harcourts, which affected median value in the region, he added.
"We are seeing a real surge of inquiry from buyers through our latest Harcourts Digital Plus Marketing, which I'm confident will see some great prices again through the spring quarter."
Across the country overall home affordability had decreased, driven by rising house prices in regions outside of the high-value Auckland/Thames-Coromandel and Central Otago Lakes regions, the report found.
Squires said high-value regions may be showing affordability improvements at the expense of lower-value regions.
"Outside of traditionally overheating markets like Auckland and Queenstown, regions with lower relative values like the Manawatū may be showing improvements as investors seek houses in regions that might yield greater returns on capital," he said.
In absolute home affordability index point terms, Hawke's Bay was one of the five most affordable regions, along with Southland, Taranaki, Manawatu/Whanganui and Otago.
