TOP STORY: Parents forced to help first home buyers

First-time buyers in Tauranga now need to earn a minimum $70,000 to afford a "decent" home.
They are also having to wait until their early to mid 30s to get on the housing ladder, with more taking 100 per cent mortgages because they are unable to scrape a deposit together.
City mortgage brokers and estate agents are reporting that wage levels in the Bay nowhere match the increase in property prices, forcing young people into long-term renting or giving them no option but to live with their parents.
For those who rent it is proving more and more difficult to raise a deposit so their parents are putting their own homes as security on their children's 100 per cent mortgages.
A leading broker told the Bay of Plenty Times that if someone wanted to individually buy a "decent" home in the Bay they would need to be on a minimum income of $70,000.
That is $41,000 more than the national average male income and $45,000 above the national average female income.
Even if a couple earning the average wage combined salaries it would still leave them more than $6000 short of reaching $70,000 needed for an average house.
Brian Berry, director of Mortgage Works in Spring St, said wages in Tauranga were not at a level that made it easy to buy property in the city and that 100 per cent mortgages were increasingly common.
"Often, people are buying a home with nil or minimal deposit," said Mr Berry, a former chairman of the New Zealand Mortgage Brokers' Association.
"There are a number of factors for this such as people wanting to travel more and pay off their student loan before they commit to buying a home. But the simple fact is that the cost of renting is high which means the ability to save for a deposit is low."
One of the main risks of signing up to a 100 per cent mortgage was that people could overstretch themselves and struggle to make the repayments, Mr Berry said.
He also said that more and more people were coming to his firm in their early to mid 30s to buy their first property compared with 10 years ago when buyers were usually in their mid 20s.
Latest national figures from market research firm AC Nielsen show that in 2005, 42 per cent of first-time home buyers were in their 30s while 19 per cent were 40 or older and 38 per cent were in their 20s.
Bank of New Zealand spokesperson Brenda Newth said: "It's not clear whether first-home buyers have been getting older in the past few years but they are definitely older than they were in the 1980s and 1990s."
David Hart, owner of The Loan Market, said it was harder than ever for first-time buyers to buy a home in Tauranga.
Mr Hart supported Mr Berry's view that more people were signing up to 100 per cent mortgages and parents were having to help out their children.
"House prices now outstrip wages, which means it is increasingly difficult for people to buy their first home. The age of buyers is older than it used to be with first timers now probably aged 30 plus when people used to be in their 20s."
Mike Williams, principal mortgage broker with Reality Mortgages, said his firm had some take up of 100 per cent mortgages but said the 95 per cent borrowing option was very common.
He said someone who wanted to buy a home for $250,000 would have to earn $65,000 and would pay the mortgage back over 25 years. However, the median selling price of a Tauranga property is $370,000 _ $20,000 more than the previous high of February's $352,500 _ while in the Mount and Papamoa it is $415,000.
Gill Beadle, group marketing manager for Bay estate agents Eves and Bayleys, said homes at the bottom end of the market in the Tauranga area started at $225,000 and a third of sales in the past three months had been close to this figure. But Mr Beadle said people who have been looking to buy in the $400,000 to $500,000 range in recent months have been facing competition from English migrants who were bringing capital to New Zealand with them.
A common way of getting on the housing ladder was to work overseas and then come back with a deposit, John O'Donnell of LJ Hooker in Mount Maunganui said.
Mr O'Donnell said it was impossible to buy a property in the Mount for under $300,000 and that property prices in Tauranga were catching up with those across the harbour. People in Tauranga looking for support from Housing New Zealand's Welcome Home Loan no-deposit scheme will be disappointed as it only covers properties worth up to $200,000.