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New Zealand Housing Affordability Returns to Long-Term Average, Cotality Says

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Housing affordability in New Zealand has returned to its long-term average due to several years of lower property values, decreasing mortgage rates, and rising household incomes, according to the Cotality Housing Affordability Report released on Wednesday.

The report indicates that every major affordability measure improved in the June quarter, with the national value-to-income ratio falling to 6.7 in the second quarter, aligning with its long-term average from 2004 to 2026, and down from the peak of 9.8 in late 2021.

Housing was not necessarily "cheap," but affordability was no longer the barrier that it was four or five years ago, Cotality NZ Chief Property Economist Kelvin Davidson said.

Mortgage repayments fell to 40% of gross household income, below the long-term average of 42% and lower than the 54% peak observed in late 2021.

The typical time required to save a 20% deposit also eased to 8.9 years, slightly below the long-term average of 9 years and well below the cyclical peak of a little over 13 years, per the report.

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