Housing & rents
Housing is the biggest cost in most New Zealand households' budgets. This page tracks prices and rents against incomes: the gap between them is the story of the last decade.
Median house price divided by median annual household income. A ratio above 5 is conventionally considered severely unaffordable.
– since the start of 2020.
Cumulative percentage change since the start of 2020. Hover the chart for exact values.
When the house-price line climbs faster than the income line, homes are becoming less affordable relative to what people earn. Rent tracking closer to CPI than to house prices shows rental costs following general inflation rather than the property market. House prices dipped briefly around COVID-19, then boomed as record-low mortgage rates took hold.
Median household income is currently $110k a year.
House prices and rents should rise no faster than household income, keeping the price-to-income ratio broadly flat over time rather than climbing. A widely cited affordability benchmark (not government policy) puts a ratio of 3–5× as reasonable; New Zealand's has sat well above that range for years, which is the core of the affordability problem this chart shows.
The cost of servicing a mortgage
The 2-year fixed mortgage rate: the single biggest driver of monthly repayments for new borrowers.
This is the interest rate alone, not the full repayment. Roughly speaking, each 1 percentage point it moves shifts the monthly cost by about $50–65 per $100,000 borrowed on a 30-year loan. The record low around COVID-19 came from the Reserve Bank slashing the OCR; rates climbed again once the Ukraine war pushed inflation up and the OCR followed it.
The 2-year fixed rate is currently 5.89%. That's down from a peak of 7.60%, but still above the low of 3.46% seen over this period. The Official Cash Rate itself is currently 2.75%.
Lower and more stable is better for borrowers: a mortgage rate that isn't swinging sharply makes repayments predictable, which matters more to household budgets than the exact level. It moves with the OCR, which the Reserve Bank sets to keep inflation at 1–3%, not to hit any particular mortgage cost - so the rate here is a side effect of that goal, not a target in itself.
Today's estimate: $3,579 per month on 80% of the current median price at the latest 2-year fixed rate (30-year table loan).
What this means
- House prices and rents are related but not the same market. Prices respond quickly to interest rates and credit conditions; rents adjust more slowly, tied to incomes and vacancy rates.
- The price-to-income ratio is the simplest affordability measure, but it ignores interest rates. Servicing costs can fall even while the ratio stays high if mortgage rates drop.
- Median figures can be skewed by the mix of properties sold or rented in a period. They are a guide to the market, not a valuation of any individual home.
Median house price, median weekly rent, the 2-year fixed mortgage rate and median household income are all live now, sourced from MCERT, MBIE, RBNZ and Stats NZ respectively.