That Home Loan Hub
Welcome to That Home Loan Hub, your ultimate guide to mastering the world of home loans and property. I'm Zebunisso Alimova, here to simplify the complexities of real estate and provide you with expert insights and the latest trends.
Whether you're a first-time homebuyer, an experienced investor, or simply curious about the property market, this podcast is for you. Join me each week as we unlock the secrets to property success and help you make informed decisions. Let's dive into the world of property together!
That Home Loan Hub
James Shares Ep #3 - Housing Wars: Auckland vs Wellington
Auckland or Wellington? Where can Kiwis actually afford to buy a home? We dive deep into the startling affordability gap between New Zealand's two major urban centers, comparing hard data that reveals which city gives homebuyers more bang for their buck.
Drawing from 2024 Infometrics statistics, we unpack the critical metrics that matter to potential homeowners. Wellington shows promising signs with an affordability multiple of 6.3 – meaning the average household earning $148,000 faces a property price of $931,000. This places our capital region within striking distance of what financial experts consider a reasonable debt-to-income ratio.
The picture changes dramatically when we look north. Despite Auckland's higher average household income of $163,000, its eye-watering average property price of $1.275 million creates a multiple of 7.8. This significant difference means Aucklanders must stretch their finances much further to enter the property market. We also explore how both regions have improved from the market peak of 2021, when affordability ratios were even more challenging, with Auckland reaching a multiple of 10.
Beyond the numbers, we consider what these statistics mean for Kiwis making decisions about where to live, work, and invest. Whether you're planning your first home purchase or considering a regional move, this data-driven comparison provides valuable context for navigating New Zealand's complex housing landscape. Have a region you'd like us to analyze next? Reach out and let us know!
Hello and welcome to the episode of James Shears. Hello, James.
Speaker 2:Aloha, how's it going?
Speaker 1:Wonderful. Let's talk about something really cool today. We are going to talk about Auckland versus Wellington.
Speaker 2:Housing affordability statistics.
Speaker 1:Woo, we'll have stats so how affordable it is for people in Wellington versus Auckland. Hit me with it.
Speaker 2:James Yep, absolutely. So this is really useful because what we do is we look at the sort of mean household incomes of people in those two areas and then we look at the mean average or the mean property prices of people in those areas and we can get a grasp of how much of your income do you have to use to buy a property in those two regions. So what we're trying to do is break down the difference between the Wellington region and Auckland region to see which is a more affordable place to buy a home.
Speaker 1:Yeah, and remember, guys, this is not a financial advice. This is us just looking at some statistics over the last few years and comparing to today's data. So, james Wellington, let's start with Wellington, because we are in the Wellington region. What's the average house value versus income?
Speaker 2:Okay, well, firstly, I'm using stats from Infometrics and the 2024 household value was $231,000 for the Wellington region Remember, we're talking about the broader Wellington region, not just Wellington City and the average household income was $148,000. So when we're saying household income, we're meaning the people within the household. It could be a two-income family. It could be a one family. So average household income is 148 000. Average property price is 931 000 for 20 2024 and that has a multiple of 6.3 well, so the higher the multiple, the more unaffordable orders yeah and the lower it is, the more more affordable it is.
Speaker 2:Yeah, we can compare that with New Zealand. Overall Average mean income is $133,000. An average household property is $925,000.
Speaker 1:That's throughout New Zealand and what's that times? How many times is that James?
Speaker 2:That's about the same as what Wellington is, so it's very close. It's about seven or so. However, should we look at Auckland.
Speaker 1:Yep Drum roll. Okay, Bring on the Auckland please.
Speaker 2:Okay, auckland, you earn more $163,000 on average Awesome Per household. However, your property, your average property price, is $1.275 million. Whew, okay, and that leads to a much higher multiple of 7.8. Wow so comparing that to Wellington. You need, wellington needs 6.3. Times income. Times income.
Speaker 1:And Auckland. Auckland is 7.8. Wow.
Speaker 2:That's based on 2024 data. Yeah, it might have come back a little bit more in Wellington's favour throughout 2024 just because of how the job markets changed there. Yeah, so those are the key stats. So you can see there that Wellington's quite a bit more affordable.
Speaker 1:That's unbelievable eh. Like if you think about what the Reserve Bank has also come up with last year in terms of DTOIs so debt to income ratio and what we go by when we do a loan application the debt to income ratio shouldn't really be over more than six. So, Wellington's sort of hitting that sweet spot, but for people in Auckland.
Speaker 2:Yeah, yeah, and they have come back a touch. At one stage, auckland was 10 wow if you think about 2021, I think it was the heat of the market. Yeah yeah, and even Auckland, wellington would have been over eight, but yeah, so they've all come back a little bit and, as I say, this was, this is from last year's data, so you know it'd be good to have a look at what's happening this year when that comes out in March yeah, no, no, that's fantastic, James.
Speaker 1:Thank you so much and hey, listeners out there. If you want us to cover any other regions, do reach out to us and we'll do a bit of research and come back on other topics. This was the episode of James Shares. Thank you, James.
Speaker 2:Jolly good. Thank you very much.
Speaker 1:Bye.