West Coast leads the way in New Zealand for housing affordability

As housing affordability continues to be a critical issue in New Zealand, the West Coast districts of Grey, Buller, and Westland emerge as beacons of affordability, according to the latest CoreLogic Housing Affordability Report.

While property values are falling, incomes rising, and interest rates stabilising nationwide, mortgage repayments still consume a large proportion of people's income, averaging 49% of gross annual average household income across the country. However, the West Coast presents a stark contrast, with significantly lower house prices and a smaller share of income required for mortgage repayments.

The average house price in New Zealand is $911,222, compared to just $342,682 in the Buller District. Additionally, the value-to-income ratio, which measures the relationship between house prices and household incomes, is 7.2 nationwide, whereas in the Grey District, it is only 3.6. This indicates that houses in the Grey District are much more affordable relative to the incomes of its residents compared to the national average.

Moreover, the share of income required for mortgage repayments in the Grey District is only 25%, almost half of the national average of 49%. This significant difference highlights the relative affordability of housing in the Grey District. Additionally, it takes an average of 9.6 years to save for a deposit in New Zealand, while in the Grey District, it takes just 4.8 years, making homeownership a more achievable goal for many residents.

CoreLogic NZ Chief Property Economist Kelvin Davidson said, "Even after the recent improvements, almost half of a household’s income being eaten up by interest repayments is relatively unaffordable compared to long-term averages." He added that any growth in house prices, even if modest, will put upwards pressure on many affordability measures. However, the data shows that the West Coast districts, particularly Grey and Buller, offer a reprieve from the nationwide housing affordability crisis.

The West Coast's relative affordability, coupled with its natural beauty and strong sense of community, makes it an attractive option for those looking to escape the housing pressures faced in other parts of the country.