Housing affordability plummets across New Zealand

If you're planning on buying a home in the near future, you might want to think again.

People look at house Source: Fair Go

New research from Massey University shows the affordability of homes nationwide has dropped by 11.4% over the past 12 months and is likely to decline even further by year's end.

Auckland reported the most alarming drop of 14.4% as house prices continue to soar, amid ongoing debate over how to combat the city's housing shortage.

Housing loan restrictions hit regions hard

Canterbury also took a hit, with affordability down 11.7%, while Southland dropped 9.4% and Otago 9.2%.

Even worse news, The Home Affordability Report found the situation is expected to deteriorate, with mortgage rates set to rise. It's compounded by a decline in the national average wage in 10 of the 12 regions surveyed.

A few areas did, however, buck the trend with Manawatu-Wanganui (2.7%), Taranaki (1.2%) and Northland (0.2%) all showing an increase in housing affordability.