Only one-third of Tauranga's homes are mortgage-free after the city suffered one of the sharpest declines in debt-free home ownership in the country in recent years.
New research from OneRoof indicated in the last five years, the proportion of mortgage-free homes in Tauranga decreased by 8 per cent, from 40 per cent in 2014 to 32 per cent in 2019.
Tauranga that suffered one of the most marked declines in the country. It stood among Selwyn, which dropped from 43 to 27 per cent, and Queenstown which dropped from 48 per cent to 40 per cent.
This comes as Tauranga's population boomed. Statistics New Zealand estimated that Tauranga's population had reached an estimated 135,000 last year, up from 121,800 in 2014.
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Valocity director of valuation and innovation James Wilson said the changing face of Tauranga was contributing to the decline.
Previously people, often retirees, would sell their property elsewhere and downsize to a mortgage-free home in Tauranga.
Now, an influx of investors and first home buyers had pushed prices out of reach for many buyers, so taking out a mortgage was often necessary, he said.
OneRoof editor Owen Vaughan said Tauranga's rising property values from a relatively low base appealed to investors.
The market was similar to Auckland's where property prices outpaced wage growth, but this would slow down as investors retreated following soaring prices, he said.
Rapson Loans and Finance mortgage and finance consultant Chris Rapson said the average mortgage stood at $400,000.
"If you're a professional couple with a decent income it won't be too difficult, but if you're a family that's a hurdle."
He noticed a new trend of young families teaming up together to buy a home before reinvesting.
Rapson advised his clients to consider what was affordable for them and urged them to get help from friends and family when making a deposit if possible.
Kiwibank Central North Island mortgage area manager Jo Kupa and an ANZ spokesperson both said new home loan terms were typically for 25 to 30 years but this could be less if the loan was refinanced or restructured.
ANZ and Kiwibank both vetted potential borrowers and customers were encouraged to contact their bank if they faced issues in meeting repayments.
Tauranga Budget Advisory Service manager Diane Bruin saw more families struggling to pay rent than mortgages.
She urged all people to clear their debts as soon as possible, particularly before retirement age.
"Superannuation won't cover repayments as well as other living costs," she said.
Living in a mortgaged house
Aimee Torrie, 36, bought a home in Parkvale for $397,000 with family help back in 2015.
Her partner's solo income supported the couple and their 5-year-old son. The family received some money from Work and Income.
Her mortgage stood at $280,000.
Torrie thought about still being in debt when she hit retirement age "every day" and aimed to be mortgage-free by age 65 so the debt was not passed on to her son.
She said the general cost of living in Tauranga, along with increasing rates, meant she "lived off overdraft."
A Pyes Pa resident, who did not want to be named, moved to Tauranga two years ago from Auckland with his partner to be closer to family when their first child was born.
Their 28-year mortgage stood at $371,000 and he devoted his bonuses to paying it off.
They hoped to invest in a house to rent out but had their doubts with another child on the way.
He aimed to be debt-free when he hit 65 but knew "it's going to be around my head for the next 30 years."
Robin Deal, who is in his forties, rented in Tauranga until 2005.
From there, the self-employed Avenues resident bought his own home and after paying off the mortgage he starting buying residential investment properties.
Paying off the first house was challenging, but the sailing got smoother after that.
He said people needed to be "financially disciplined" and save their money instead of spending beyond their means.
Top 5 mortgage-free locations in the country
1. Coromandel: 2019 - 54% mortgage-free / 2014 - 53% mortgage-free
2. Wairoa: 2019 - 51% mortgage-free / 2014 - 49% mortgage-free
3. Kaikoura: 2019 - 50% mortgage-free / 2014 - 46% mortgage-free
4. Opotiki: 2019 - 49% mortgage-free / 2014 - 48% mortgage-free
5. Far North: 2019 - 47% mortgage-free / 2014 - 46% mortgage-free
Lowest 5 mortgage-free locations in the country
1. Selwyn: 2019 - 27% mortgage-free / 2014 - 43% mortgage-free
2. Waikato: 2019 - 27% mortgage-free / 2014 - 34% mortgage-free
3. Hamiton: 2019 - 27% mortgage-free / 2014 - 32% mortgage-free
4. Lower Hutt: 2019 - 28% mortgage-free / 2014 - 30% mortgage-free
5. Upper Hutt: 2019 - 28% mortgage-free / 2014 - 28% mortgage-free
1. Auckland: 2019 - 33% mortgage-free / 2014 - 30% mortgage-free
2. Hamilton: 2019 - 32% mortgage-free / 2014 - 27% mortgage-free
3. Tauranga: 2019 - 40% mortgage-free / 2014 - 32% mortgage-free
4. Wellington: 2019 - 29% mortgage-free / 2014 - 27% mortgage-free
5. Christchurch: 2019 - 36% mortgage-free / 2014 - 32% mortgage-free
6. Dunedin: 2019 - 33% mortgage-free / 2014 - 32% mortgage-free
Source: OneRoof and Valocity