If you thought taking seven years to save a 20 per cent deposit for an Auckland house was bad, spare a thought for first home buyers in some parts of the United States.

Research by the United States Mortgage Insurers Association shows it can take someone earning the median income up to 37 years to save a 20 per cent deposit in California for a median-priced house.

That was the longest timeframe in the US but even the shortest was 12 years for residents in the state of Indiana.

But the long time frame to save the deposit means most young buyers are not saving the full 20 per cent.



The median down payment for buyers under the age of 37, a group that typically includes a majority of first-time buyers, was just 7 per cent last year, according to the National Association of Realtors.

In New Zealand, national research by interest.co.nz found it takes a typical household 3.6 years (with a saving rate of 20 per cent) to save a 20 per cent deposit, as now required by most banks.

That stretches out to seven years for Auckland and 7.7 years for the Queenstown/Lakes District.

But Auckland mortgage broker Karen Tatterson says most young people buying in Auckland are not getting to 20 per cent despite the restrictions on banks to lend to those with smaller deposits.

"There are very few getting to 20 per cent."

"However I have seen an influx of people getting to 10 per cent of late."

Tatterson said most millennials getting onto the housing ladder in Auckland were using their KiwiSaver and the Home Start grant which meant they had a cap of $650k to buy a house.


That meant they were tending to buy new builds in places like Papakura, Takanini and Hobsonville point.

Of the six or seven applications she had done recently just one was 20 per cent and they only managed to get there by being propped up using family support.

Figures from the Reserve Bank show around one third of the money lent to first home buyers in May went to people who had a deposit of under 20 per cent.

But Tatterson said having a 10 per cent deposit also meant it was difficult to get support from the banks - there were no cash backs and people had to pay a low equity fee or higher interest rates.

People who put down a $65k deposit on a $650k house would have a mortgage of $585k, which was affordable for two people working full time.

But she said saving a deposit was the biggest challenge.

"A lot of these millennials do have large student loans. When you take that out of their income it does have an impact."

Those who managed to get a deposit together did not have other debt, kept their credit card limits low and did not have the latest TV on hire purchase.

"They have decided to make sacrifices."

She said the average length of time it took for her Auckland clients to save was three to five years.

However, Kiwi millennials can take some comfort that they are not alone in facing the challenge of getting on the housing ladder.

Global research by the Financial Times has found despite half of those in the 18- to 36-year-old age group saying they felt financially secure an equal number said their financial situation or debt had stopped them from buying a home.

That was despite most of the respondents saying they had received some form of financial support from family and saying they were professionals with well-paying white collar jobs.

One London-based respondent said he had been given opportunities that were not available to all so found it "baffling" that he was struggling to afford to live, get married and buy a house".

Another based in Connecticut, said she believed the millennial experience varied greatly depending on where they lived and the cost of living.

"I live in the greater NYC area and it seems like nobody is settling down, buying houses, having kids, or even committing to long-term relationships," she wrote. "

My friends in the midwest and mid-Atlantic regions are doing all of these 'adult' activities at a much more rapid pace."

Others pointed to their own situation being closely linked to how well off their parents were.