House prices rising faster than wages for first-time buyers
House prices rose 2.5% from year ago levels in November 2005, according to figures from the Office of the Deputy Prime Minister.
While overall house price inflation has slowed to less than the growth rate of wages, in the case of first-time buyer (FTB) properties, prices in November were still rising at 5.2% per annum, which is ahead of wage rises.
Prices of FTB homes have consistently grown faster than the average for all homes since January 2004 and are now 18% higher than they were in January of 2004 compared with 15% growth in prices for all homes over the same period. This means that affordability remains a major issue for FTBs, despite the housing market slowdown of the past year.