More first-home buyers are entering the Tauranga property market but experts say they are taking on bigger debts to gain the keys to their own home.
Financial advisers say saving for a first home is "extremely hard" and buyers were borrowing as much as they could to get on to the property ladder.
Local real estate agents said more first-home buyers with higher incomes were entering the top end of the market, leaving people with less savings to buy in Tauranga's more affordable areas.
CoreLogic data showed first-home buyers made up 17 per cent of Tauranga sales so far in 2019, compared with 16 per cent last year and 12 per cent five years ago.
Nationally, new Reserve Bank figures showed first-home buyers with deposits less than 20 per cent last month took out $325 million worth of home loans, up 46 per cent on February last year.
It made them the country's fastest-growing home loan customers.
Yet, it also meant their average home loan size had jumped to $441,576 - about $100,000 higher than the same time last year, and $83,000 higher than that paid by first-home buyers with deposits of at least 20 per cent.
This comes after OneRoof data released this month showed the proportion of mortgage-free homes in Tauranga had dropped to 38 per cent in 2019 from 40 per cent in 2014.
Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys, said more well-qualified professionals with higher incomes were entering Tauranga's property market.
"They are buying in a higher price range of $800,000-plus," he said.
"That leaves people with less savings to buy in areas where they can afford to get on the property ladder."
General manager of Tremains Bay of Plenty and Waikato Anton Jones said increased house prices meant first-home buyers had to borrow more.
"It is harder to get deposits, and wages have not gone up at the rate house prices are," he said.
"However, it is probably cheaper to borrow now compared to 10 years ago when interest rates were a lot higher."
Tauranga Mortgage Brokers director Tracey Robinson said it was normal for first-home buyers with the minimum deposit to borrow as much as they could to get on to the property ladder.
"They are borrowing the maximum they can, which is 90 per cent of the purchase price. It is the first step on the ladder."
Tauranga Budget Advisory Service manager Shirley McCombe said buying a first home was "extremely hard to budget".
"Wages are low and costs are high such as rent, travel, school fees, parking and food."
McCombe said coming up with the deposit was the biggest hurdle first-home buyers faced because of high rents and sometimes bad credit ratings.
Reducing expenses and cutting living costs including renting, eating out and entertainment could help people save for their first home, she said.
"For some, this may mean moving home to Mum and Dad and paying board to save money."
Senior property economist Kelvin Davidson said Tauranga was a hard market to crack for first-home buyers.
However, he said first-home buyers could draw on HomeStart Grants or KiwiSaver to help.
Valocity director of valuation innovation James Wilson said there had been a surge in the number of people buying flats as their first home.
"Flats are now the largest property group in the first-home buyer market," he said.
"First-home buyers are breaking the mindset of buying the family home they grew up in and are now considering what options work for their current situation."
Alice and Paul Ferris-Day bought their first home in Gate Pa in May last year for $415,000 after starting with no savings.
The couple had to borrow $380,000 and used their combined KiwiSaver and HomeStart Grant of $10,000 to be able to buy their first home.
"We were really concerned it wasn't going to happen," Alice said.
The couple bought the single-storey, three-bedroom home off Alice's parents.
"We had to buy as with the housing market the way it is we were concerned we may not have found another house to buy or rent so this pushed us to make it happen," she said.
"The fact we brought the house off my parents meant we didn't have the real estate fees which helped."
HOW MANY TAURANGA HOMES DID FIRST-HOME BUYERS BUY?
2019: 17 per cent
2018: 16 per cent
2017: 16 per cent
2016: 14 per cent
2015: 12 per cent
Additional reporting - NZME