For many Kiwis, buying a house in New Zealand is an unobtainable dream. Back in May, Housing Minister Chris Bishop made headlines for answering yes to the question: do house prices need to fall? “Average house prices to the average household income are too high by any objective measure. They are severely unaffordable by international standards,” he said.

While house prices have dipped in recent months, buyers still face steep climbs in many parts of the country.

Many experts measure housing affordability by working out the ratio of average household incomes to average property values, with 3-4x the average income widely viewed as affordable. According to economic consultants Infometrics, the nationwide average household income was just over $125,000 in 2023, so $500,000 – 4x the average household income – is a good ballpark figure for affordability in New Zealand.

But where can you buy a house for $500,000 or less in New Zealand? Not a townhouse. Not a unit. Not an apartment. A house. Surprisingly, there are options.

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Kawerau, in the Bay of Plenty, is the country’s smallest and cheapest district, with an average property value of $401,000. In the last 12 months, 91% of house sales in Kawerau were for $500,000 or less. So if you’re looking for an affordable home, you have a nine in 10 chance of finding one in Kawerau (at the time of writing, 64 properties in the district were listed for sale on OneRoof).

If you miss out in Kawerau, you could head to Ruapehu, in Manawatu-Whanganui, where the average property value is $411,000 and 88% of house sales in the last 12 months were at or under the $500,000 threshold.

Buyers chasing affordable homes should also direct their eyes to the South Island districts of Buller, Gore, and Clutha, where the average property value is $431,000, $483,000, and $463,000 respectively, and 75% of homes sold for less than $500,000 in the last 12 months.

Rural vs. Urban Affordability

All the above are largely rural communities but those looking for affordable homes in town or city settings won’t be completely out of luck.

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In Invercargill, where the average property value is $530,000, over 60% of properties sold for less than $500,000 in the last year. That’s a total of 556 houses out of 917 sold all up. So if you are looking for a cheaper house in Invercargill, you’ve got a better than three in five chance of finding one (and on OneRoof there are 183 houses for sale in Invercargill with search prices of less than $500,000).

Invercargill might be the capital of affordability in the South Island. But it’s not the only place. Over a quarter of properties in Dunedin sell for under $500,000, and just over 9% in Christchurch.

That might not sound like a lot. But that “just over 9%” in Christchurch equates to 483 house sales.

Christchurch has a higher share of affordable homes than Wellington or Auckland. Photo / Peter Meecham

The North Island

Obviously, New Zealand’s most affordable properties will not be the most luxurious. And some North Islanders will bristle at the idea of moving south (I can say that, I’m a North Islander), but it’s a compromise some will be willing to make.

If you are looking for a bargain in the North Island, there are still options. Over 10% of properties in New Plymouth, Palmerston North, Rotorua, and Whangarei sold for less than $500,000.

And while affordable houses aren’t a dime a dozen in Napier City, 68 houses still sold for $500,000 or less in the last year 12 months (7.6% of the total).

The Unlikely Places

It’s the larger cities that come last when it comes to affordability. Less than 1% of houses sold in Auckland had a price tag under $500,000 over the last year. It’s the same story in Wellington, where less than 5% of houses sell for less than half a million bucks.

But none of these places compare to the Queenstown-Lakes district. Not a single house sold for less than $500,000 in Queenstown or Wanaka in the last 12 months. There is almost a 0% chance of finding an affordable house in this part of the country.

Listings data from OneRoof supports the above analysis. Of the 38,000-plus residential properties currently for sale in New Zealand, less than 20% have a search price of less than $500,000, and of those around 2000 are houses.

Broken by region, West Coast and Southland have the highest share of sub-$500,000 houses – 54.6% and 51.1% respectively – while Auckland has the lowest, at 2%, although the figure would be higher, albeit marginally, if apartments and townhouses were included in the search criteria.

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Of the country’s major metros, Queenstown is a dead zone for houses on the market for less than $500,000, but the share of affordable houses in Wellington City, Hamilton and Tauranga is in the low single digits. Dunedin has the biggest share, at 21.5%, followed by Christchurch, at 10.9%.

• Ed McKnight is the resident economist at property investment company Opes Partners