Auckland housing considered unaffordable

Auckland is the only region in North Island of New zealand that is considered unaffordable, according to new figures.

The First Home Buyer’s Affordability report from interest.co.nz shows the affordability of buying a typical first home in Auckland has deteriorated dramatically, with the price of a lower quartile home now worth $616,500.

That’s up from $584,500 in April and $502,100 in May last year and is more than $65,000 over the price threshold for the Government’s KiwiSaver HomeStart grants – a new record. The report says the estimated mortgage repayment for an entry-level buyer in Auckland would be $821.83 a week; about 54 percent of a couple’s after-tax pay.

In May 2014, it cost 45.8 percent of a couple’s pay and in May 2013 it was only 38.1 percent.

If mortgage payments take up more than 40 percent of a homeowners after-tax pay it is considered unaffordable.

“That means housing is likely to be becoming severely unaffordable for first-home buyers in Auckland because as well as mortgage payments, they will be faced with other property-related expenses such as rates, insurance and maintenance costs, which could severely impact their finances,” the report warns.

The cheapest place to buy a house is Southland, with a lower quartile price of $139,400.

This which would only take up 11.2 percent of a first home buyers pay, compared to the 54 percent Aucklanders could face.

In the Wellington region a lower quartile home could take up 26 percent of a first home buying couple’s take home pay and in Canterbury, 28.4 percent