Housing affordability in Auckland, Wellington sees ‘significant’ improvement
Wednesday, 11 March 2026
There has been a “significant” shift in housing affordability around the country, and it’s now at its best level in nearly a decade, a property economist says.
And Auckland and Wellington are two of the areas to have seen the biggest improvement.
Cotality’s latest housing affordability report is out, putting the national median price at $803,151 in the three months to December, which is 7.2 times the median annual household income of $111,400.
That was the lowest ratio since a brief period in 2019 and before that 2016, although it remained above the long-term average of 6.8.
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It was also a big improvement from the stretched affordability seen at the peak of the Covid-era boom market when the ratio hit its worst level on record at 8.8 in late 2021.
Cotality chief property economist Kelvin Davidson said housing was not cheap, but for those trying to buy their first home or upgrade the conditions were the best in several years.
Affordability had improved materially as several market forces moved in the same direction, and there was now a level of affordability much closer to the historic norms, he said.
“Lower house prices, rising incomes and falling mortgage rates have helped ease the pressure on buyers.
“The house-price-to-income ratio has come down, and it’s now easier to save for a deposit, and to service a mortgage.”
There were still challenges, but affordability was no longer the handbrake it used to be, he said.
“No-one would say it was easy to buy, but it’s easier, and the shift across several measures is pretty significant.”
It was not just the national house-price-to-income measure that had improved. Mortgage servicing costs and deposit saving time frames had also taken a turn for the better.
Nationally, households were spending 42% of their income on servicing an 80% Loan-to-Value Ratio mortgage in the last quarter of 2025, the report showed.
That meant servicing costs were now back at the long-term average of 42%, well down from a peak of 56% in 2022.
Meanwhile, saving for a 20% deposit had fallen to 9.6 years on average. That remained up on the long-term average of nine years, but was an improvement from 13.4 years back in 2021.
Of the main centres, it was Auckland and Wellington where affordability had improved the most.
Auckland’s median house price was $1.04 million, but its house price-to-income ratio was 7.5, the lowest level for more than 11 years and just 0.2 points below its long-term average of 7.7.
It now took an average of 10 years to save a deposit in the region, but that was a multi-year low and less than the long-term average of 10.2.
Mortgage servicing accounted for 44% of Aucklanders’ incomes, down from a high of 63% in late 2021, and well below the long-term average of 48%.
In Wellington the median house price was $878,869 while the house price-to-income ratio was 6.4.
That ratio was in line with its long-term average, and made it the most affordable of the main centres on that measure.
It took 8.5 years to save a deposit in the region, down from 11.0, and its mortgage servicing figure was 37%, which was below the long-term average of 40%.
Of the other main centres, Tauranga was still the least affordable main centre, with a median price of $928,718 and a ratio of 8.5, which was down significantly from the late 2021 peak of 11.9.
Hamilton, Christchurch and Dunedin had smaller improvements in affordability, and now had house-price-to-income ratios of 6.9, 7.1, and 6.7 respectively.
Davidson said the recent under-performance of house prices in Auckland and Wellington had played an important role in restoring affordability in those markets.
“Hamilton, Christchurch and Dunedin have seen less improvement in affordability, as prices in those markets have remained more resilient and have shown modest growth in recent months.”
But the report contained less positive news for renters, as rental affordability remained stretched.
Rents took up 27.9% of gross household income nationally, down from a peak of 28.5%, but still above the long -term average of 25.8%, the report showed.
A recent decline in rents in Auckland and Wellington had brought those markets closer to their long -term norms, Davidson said.
“But most other parts of the country continue to record relatively high rent-to-income ratios, and some tenants are likely to earn less than the median used in these measures.
“Still, as rent growth is driven by tenant affordability more than landlord costs, and many tenants are already stretched there is little scope for increases in the near term.”
Overall, Davidson said there was reason to be cautiously optimistic about affordability continuing to be better than it had been in the recent past.
There were still limits on how far prices could rise in the near term, he said.
“But a lasting improvement in affordability requires more homes to be built, not just in absolute terms, but also relative to demand.
“The good news is that the Government is pushing hard on the supply levers at present. More land availability and the required infrastructure are key targets.”