The Press Picks: Top 10 most affordable districts to buy a house in South Island

The Press Picks looks at everything the South Island has on offer, from the best pie shops to the best beaches and the best places to retire. For our first edition we’re looking at the 10 most affordable districts to buy a house across the Mainland, based on Core Logics’ latest Housing Affordability Report.

An affordable region means more than just cheap houses. Core Logic factors in the average income for each district, how long it takes to put down a 20% deposit saving 15% of that income, and how much of your pay goes towards a standard 25 year mortgage.

Core Logic’s senior property economist, Kelvin Davidson, said although “there’s nothing revolutionary” about the results, “it’s not all straight forward”.

“In these more affordable markets house prices are relatively low - and that sounds self evident,” Davidson said, but “there’s always trade offs”.

“From an owners perspective you might at face value think Greymouth or Buller looks really affordable, but are there jobs there that suit you? A smaller labour market means it might look affordable, but there’s a smaller number of jobs,” he said.

However, these smaller labour markets are on the rise with Development West Coast reporting 2.8% employment growth over the year to September, or 406 new jobs.

In a statement, Development chief executive Heath Milne said it is not just the region’s housing affordability that makes the West Coast appealing.

“Moving to the Coast is a great way to get ahead in your career, enter the property market, while also improving your work-life balance,” he said.

Those who have moved to the West Coast don’t appear to regret it.

Tim Bennet left Christchurch eight months ago to buy a house in Taylorville, Grey District with his wife Kylie and said “I wish I did it years ago”.

They were looking for a house for four years before that, and eventually decided the affordability of the West Coast was too good to pass up.

Upon moving, they opened their own business - the Odd Fish Gallery and Emporium, selling a selection of quirky art pieces.

“We absolutely love it over here, it's like travelling back in time,” Bennet said.

Grey District’s also wooed Linda Grace and her wife Penny to move from Picton, where they purchased a century old stable converted to a house, just 750 metres from the sea.

They didn’t even know Barrytown existed, but once they found the property they bought it right away.

Grace runs two businesses on the West Coast: Select Catering, providing packed lunches to visiting trail walkers, and Select Seeds, selling packets of hand-roasted seeds.“You can still buy an affordable home or a doer upper and make a cracker of a life over here.” Grace said.

So, keeping all that in mind, let’s dive into the districts and see what the numbers say.

1. Grey district

With an almost unbelievably cheap average house price of $367,610, the Grey District takes the throne for the most affordable region in the South Island.

The district which includes Greymouth, Runanga, Blackball, and Cobden

It would take just 4.8 years to save for a 20% deposit in this district on the average income of $102,813, giving home buyers one of the best property value to income ratios in the country: 3.6.

In terms of paying off the mortgage, it’d only take 25% of the average paycheck to do so over 25 years. 2. Buller district

Buller District actually has the cheapest average house price in the South Island at just $342,683, but a lower income than the Grey District bumps it off the number one most affordable spot.

The district stretching from Punakaiki to Karamea along the Coast taking in the towns of Westport and Reefton also goes as far inland as Springs Junction and has a population of nearly 10,000.

Still, taking just 5.4 years to acquire a deposit on an average income of $85,173 isn’t anything to complain about, and earns Buller District the silver value-toincome ratio of 4.0. Servicing the 80% mortgage would take a bit more of your pay too, at 28%.

3. Westland district

Westland District, whose main hub is Hokitika, has an $392,372 average house price puts it firmly in third place on our list when combined with the $86,180 average income.

At 6.1 years it would take eight-anda-half more months to save for a 20% deposit in this district versus the Grey one, but you’d be boasting a tidy property value to income ratio of 4.6. Considering the numbers, 31% of your pay would be going to service the 25 year mortgage.

4. Timaru district

Despite having the most expensive average house price on our list, at $509,643, Timaru is actually barely missing out on the placing in the top three.

The highest income on our list too, $108,241, is what’s propelling the district near the top. It would only take 6.3 years to save a deposit - just two-and-a-half more months than Westland District. It’s also only just behind on the income to value ratio, at 4.7. Servicing the 80% mortgage would take nearly a third of your paycheck, at 32%.

5. Waitaki district

Things remain close in the number five spot too, with Waitaki District’s average house price coming in at $471,274.

Oamaru, the largest town in the district, is known for its heritage precinct, blue penguins and steam punk.

It would only take 6.5 years to save for a 20% deposit in this district, again another two-and-a-half months more our 4th place district, on an average income of $96,993. A solid 33% of this income would go towards paying the mortgage, but it gives Waitaki District a value to income ratio of 4.9.

6. Invercargill city

Invercargill City has a lower average house price than Waitaki District, at $455,955, but also has a lower average income.

Around $91,260 is what you can expect to pocket on an average job in Invercargill, giving the area a value to income ratio of 5.0. The pattern continues dropping to the number six spot, which requires another 0.2 years more to save for a deposit, 6.7, than the above district. The 80% mortgage would steal 34% of your paycheck.

7. Clutha district

The Clutha District, which includes Balclutha, Milton and the beautiful Kaka Point is the seventh most affordable district in the South Island with an average property value of $400,088. If the district had a fractionally higher income it might’ve snuck above Invercargill - the average $78,766 meaning it would take just 0.1 years more to put the 20% deposit together, at 6.8 years, and was just 0.1 worst on the value to income ratio, at 5.1. Over 25 years, 35% of your pay would go to the mortgage.

8. Southland district

The Southland District which includes Te Anau, Winton and Rakiura-Stewart Island, has slightly more expensive homes on average than Clutha, nearly breaching the half a million mark, at $497,657.

A higher income comes with this price tag however, with the average yearly pay coming to $95,102. It would take a round 7.0 years to save for a deposit in this district, which has a 5.2 value to income ratio. Servicing the 80% mortgage would take 36% of your paycheck over 25 years.

9. Gore district

With an average house price of $418,752, Gore District just scraped itself into the number nine spot. With the lowest average income on our list, $77,054, it would take 7.2 years to save for a %20 deposit in this district, with a property value to income ratio of 5.4. Over 25 years, 37% of your income would be sucked into mortgage payments.

10. Waimate district

Waimate District scraped it’s way onto our list with an average house price of $440,672, making it the tenth most affordable district in the South Island.

An average income of $80,570 meant it would take 7.3 years to save for the deposit, just barely behind Gore District. Again, a value to income ratio of 5.5 was just 0.1 behind, and over 25 years 38% of your pay would go towards the mortgage.

Avoid: Queenstown-Lakes district

Unfortunately, if you’re on an average salary in the Queenstown-Lakes District it would be quite literally impossible to buy an average house without a magical genie granting you three wishes. Just for fun, we included the numbers - but be warned, they aren’t easy on the eyes. The average house price, albeit probably skewed by overseas millionaires, is $1,716,650. That’s more than double every other average house price on our most affordable list, yet the average income is just $20k above Timaru, at $129,252. This gives a scary value-to-income ratio of 13.3, and means it would take 17.7 years just to save the 20% deposit, nearly two decades. That might be achievable, but servicing a 25-year mortgage certainly isn’t as it would require 91% of your pay, leaving you with 9% to live on.

Yikes.