Auckland housing affordability has deteriorated dramatically since 1999, with first-home buyers facing higher costs and fewer affordable properties in nearly every Super City suburb, a new report reveals.
Affordability across Auckland plunged 14.4 per cent in the last year alone, a separate report shows, as house prices rise faster than people's wages.
And there are predictions of more pain for those struggling to get on the property ladder. Experts warn the situation is worsening inequalities across the city and risks shutting a generation out of home ownership.
"It is only going to get worse and it's going to get worse exponentially as interest rates start to rise," Loan Market mortgage adviser Bruce Patten said.
A new Auckland Council report maps the rise in Auckland house prices over the last 15 years and relative deterioration in affordability for first-home buyers.
"The share of sales categorised as affordable has fallen substantially during the study period, from 74 per cent in 1999 to 39 per cent in 2013," the Auckland's Housing Market: Spatial Trends in Dwelling Prices and Affordability for First Home Buyers report warns.
Overall, 95 per cent of Auckland areas measured in the report showed an absolute decrease in affordability over the study period.
Southern and western Auckland had proportionally more affordable house sales, which had been more widespread across Auckland in the study's first two years.
"Many areas around the urban periphery in northern and western Auckland have experienced relative decreases in affordability when compared to Auckland as a whole.
"Conversely, some areas such as the city centre and fringe, Helensville/Parakai, Waiuku and Wellsford had an overall increase in relative affordability."
Lower interest rates since the global financial crisis had made some areas temporarily more affordable - underlining the link between interest rate changes and the ability of homeowners to service mortgage costs. Auckland's median house price has surged from $262,000 in June 2002 to $615,000 last month - fuelled by a shortage of properties and land, construction costs and immigration pressures.
The Auckland Council report defined "affordable" housing as housing costs of less than 30 per cent of a first home buyer's total household income. First home buyers were defined as an employed couple aged 25-34, with a 10 per cent deposit on a 30-year loan.
Auckland's housing was categorised as "severely unaffordable" in this year's Demographia survey, putting acute pressure on low and middle income earners.
A report released yesterday by Massey University found affordability in Auckland deteriorated by 14.4 per cent in the last year alone - the worst result nationwide.
National house prices had jumped by $30,000 in the last year but wages had only risen by about $1500.
Mr Patten said the trend was disturbing but there was no end in sight. People's incomes were not keeping pace with rising house prices, creating a bigger gap between the "haves and have-nots".
Rising interest rates were set to make the problem worse, he warned, pushing the home ownership dream beyond the means of many Aucklanders.
"It goes hand in hand with the wealth gap growing in New Zealand like it is in other countries."
Georgina Kupa was in her early 20s when she and husband Cyril scraped together a $3300 deposit to buy their first home.
It was 1969 when the couple bought a Papakura section in President Ave for $1500 and paid $15,000 to have a home built on it.
Both working as psychiatric nurses at the time and with two young children, they were able to capitalise Government family benefit payments and put it towards the 20 per cent deposit they needed.
The family benefit payment was $1.50 a week per child, guaranteed until they turned 16, or 18 if in fulltime education. The cash payout gave Mr and Mrs Kupa $1950 to bolster their own savings.
"It was enough for us to get a deposit and in those days houses were very very cheap compared to today's prices," Mrs Kupa, now 67, said.
They lived in the house for 21 years before selling it and buying an investment home and freehold property on Maori land.
They couple now live in Weymouth in a property they part-own with one of their daughters.
Mrs Kupa, who manages a social services agency in Wiri, said it was tough for people wanting to get into their first home in today's market.
"Unless you're both working and have got decent jobs ... most of the people I work with are beneficiaries and there's no way any of them will ever be able to save."
5 tips to beat blues
• Look for properties outside the central city and sought-after city fringe areas - particularly in West and South Auckland.
• Consider downsizing the quarter-acre dream for a unit or townhouse.
• Apartment living can save you money - many inner-city apartments are available for less than $400,000.
• Compromise on living in the "right" school zone, which can add tens of thousands to a house price.
• Hold off buying until you can raise a bigger deposit, reducing your loan principal - and repayments.