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31 minute read
Is NZ Housing Affordability Back to Normal?
House prices relative to incomes have dropped to 6.7x. Before jumping into the spring property market, see what living costs mean for your mortgage.
Nurain Nadzirah
28 August 2026
Source : RNZ
Housing affordability in New Zealand just did something it hasn't done in years: it went back to normal.
And after the volatility of the past decade, normal feels almost suspicious.
If you are weighing up whether to buy a home this spring, this single shift changes three things at once:
- How big a mortgage you can realistically carry.
- How much buffer you have if interest rates wobble again.
- Whether waiting another year is likely to help your position or cost you more.
Worth taking five minutes to understand what has actually changed—and what hasn't.
Why Are NZ House Prices Becoming More Accessible?
•The income gap is closing: Buying an average home now takes 6.7x the average household income, down from a brutal 9.8x peak.
• Mortgage eases: A new mortgage now claims around 40 cents of every household dollar, a welcome drop from the 54 cents buyers were swallowing in late 2021.
• Renters getting a break: Rent taking the smallest bite out of weekly pay packets in close to a decade.
• Regional reality: Wellington is currently the cheapest main centre relative to local incomes, and Auckland has improved. Christchurch and Dunedin, meanwhile, have barely budged.
But What Is Currently Squeezing Household Budgets?
• Job market jitters: Unemployment just hit an 11-year high (5.6%), meaning hundreds of thousands of Kiwis are looking for more hours.
• Supermarket squeeze: Everyday grocery staples like mince, lamb, and bread have climbed roughly twice as fast as wages over the past decade.
Sure, the value-to-income numbers look healthier on paper. But if your personal income carries a bit of uncertainty, that is the metric that should drive your property decision—not the national average.
Working with a tighter budget at the moment?
Our mortgage adviser can help you get a clear picture of what your household can comfortably afford to service.
What Else Could Still Shake NZ Property Market?
• The November election: Housing affordability and the cost of living are shaping up to be the deciding issues at the ballot box.
• OCR reviews: With the Official Cash Rate sitting at 2.5%, economists remain split on whether rates will hold or climb in the upcoming 2 September decision.
• Global shocks: Ongoing Middle East conflicts are pushing up wholesale funding costs, which is why some banks have been lifting home loan and term deposit rates.
So…Is it actually a good time to buy?
Nobody can promise you the absolute bottom of the market.
What the numbers do show is that the extreme stretch of 2021 has genuinely eased. Deposits are more achievable. Mortgage serving costs are closer to long-term averages.
That's to say, it’s not a green light to buy now and ask questions later.
It's simply a reminder that the maths is worth doing properly before you start browsing open homes.
👉🏻 Want to make sure your finances are inspection-ready?
Find out the 4 Ways to Spring Clean Your Credit Score Before House-Hunting.
This article is for informational purposes only. It does not consider your personal financial situation or objectives. Please consult with Tella mortgage and financial experts before making any decisions regarding your mortgage or debt strategy.
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