Times are tough for Tauranga homebuyers

Thinking of buying an average-priced home in Tauranga?
Unless you're childless and have two incomes to throw at the mortgage, it's probably out of reach, according to a new affordability study.
The Roost Home Loan Affordability Report showed although median weekly after-tax pay for a typical buyer in Tauranga had risen by more than $100 since 2005, it was still not high enough to buy a median-priced house - even with a 20 per cent deposit.
The report, issued by the website interest.co.nz, found it now took just over 60 per cent of one average income to pay the mortgage on a Tauranga house bought at last month's median price of $328,000.
It assumed the typical Tauranga buyer was aged 30 to 34 and took home a weekly wage of $694, of which $277 was disposable - not enough by itself to afford the mortgage payments on the median-priced home.
Based on current incomes and house prices, it would take a buyer almost eight years to save the 20 per cent deposit required by most banks.
At 6.73 per cent, the average bank interest rate for a two-year fixed rate mortgage last month was slightly less than the rate as at August but higher than the 6.58 per cent rate of September 2009.
For a standard Tauranga household - consisting of one adult male working fulltime, one adult female working part-time and a 5-year-old child - it took just over 40 per cent of the average take-home pay to service a mortgage of a home purchased last month.
This meant median-priced housing was still not affordable for families in Tauranga, even when both adults worked.
Brian Berry, a mortgage adviser at Rothbury Insurance Brokers, said Tauranga was a "difficult place" for the average homebuyer.
"It's because the income tends to be relatively low while property prices are relatively high.
"It's always been an issue and will continue to be an issue."
But there was hope to be found in new opportunities that weren't around two years ago, Mr Berry said.
These included a reduction in lower-priced property values, relaxation of lending criteria and the Welcome Home Loan offered through KiwiBank, where first homebuyers did not need a deposit for loans of $200,000 or less.
"My feeling has always been that if the buyer finds an affordable property that meets all of their requirements, I'd suggest they consider purchasing," Mr Berry said.
"No one can predict whether values will go down, stabilise, or go up."
Tauranga registered valuer Shayne Donovan-Grammer said there had been good interest from homebuyers in the Welcome Home Loan.
He said younger homebuyers tended to look at new properties in good locations but incomes were "not that flash".
There was a lesson to be learned from those buyers who bought homes in the boom, only to have to sell up at a loss later when they could not afford to service the mortgage.
"To first home buyers, I'd suggest they make sure they can afford to repay over a sustained period."
Interest.co.nz managing editor Bernard Hickey said Tauranga remained one of the most unaffordable cities in the country for homebuyers.
"Basically, if you're buying a house in Tauranga you need two median incomes and to not get pregnant. It's very hard to own a family home.
"Either you need to win Lotto, get some help from your parents or have already been in the market for a long time.
"It's extremely tough for them."
Mr Hickey said councils needed to make more land available for affordable housing if they wanted future ratepayers.
"The more unaffordable the city becomes to live in, the less attractive it is to young homebuyers."
BUYING A HOME?
The typical Tauranga homebuyer earns a weekly median take-home pay of $694.54
Has a weekly disposable income of $277.27
Would need 60.1 per cent of their income - or $417.26 each week - to pay off the mortgage on a median-priced house bought last month
Would need to spend 7.9 years saving the 20 per cent deposit required by most banks
Source - interest.co.nz. The figures reflect conditions as at last month.