Estimated mortgage repayments would now set the typical Auckland entry-level buyer back $821.83 a week. Photo / Dean Purcell
Estimated mortgage repayments would now set the typical Auckland entry-level buyer back $821.83 a week. Photo / Dean Purcell
The bungalow is one of 10 refurbished former air force properties.
The affordability of a typical first home in Auckland has deteriorated dramatically, new figures show.
The latest interest.co.nz First Home Buyer's Affordability Report shows entry-level housing is now considered affordable in every New Zealand region except Auckland, where the price of a lower quartile home has jumped by $170,100 (38.2per cent) in the past two years alone.
The city's typical lower quartile property - generally considered the domain of first home buyers - is now worth $616,500. This is a record high and more than $65,000 over the price threshold for the Government's KiwiSaver HomeStart grants.
Estimated mortgage repayments would now set the typical Auckland entry-level buyer back $821.83 a week, eating up 54 per cent of a couple's after-tax pay, according to the report. This is up from 45.8 per cent in May last year and 38.1 per cent in May 2013.
Housing is considered to be unaffordable if mortgage repayments consume more than 40 per cent of a homeowner's after-tax pay.
"That means housing is likely to be becoming severely unaffordable for first-home buyers in Auckland because as well as mortgage payments, they will be faced with other property-related expenses such as rates, insurance and maintenance costs, which could severely impact their finances," the report warns. A hike in interest rates would put them under even more financial strain.
The cheapest location to buy a first home remains Southland, with a lower quartile price of $139,400, consuming 11.2 per cent of a typical first home buying couple's take home pay.
The most expensive entry-level region outside Auckland was Central Otago-Lakes ($388,900), where mortgage repayments would eat up 35.4 per cent of after-tax income.
As well as contending with rising house prices, Auckland first-home buyers would also struggle to save an entry-level deposit, the report says.
Loan Market mortgage adviser Bruce Patten said clients were missing out on homes, with prices going up every week. "It's getting to the point where first-home buyers will be predominantly shut out of the Auckland market altogether."
The bungalow is one of 10 refurbished former air force properties.
Old air force house sets $1.6m record
A refurbished 1930s former air force bungalow has sold for $1.6 million, setting a new price record for the Hobsonville Pt development.
About 250 people turned out for yesterday's auction on site at 2 Sunderland Ave. Bidding started at $1 million and the four-bedroom property was passed in at $1.5 million but sold hours later after negotiation.
Hobsonville Land Company sales and marketing development manager Mark Fraser was stunned by the turnout. He said the buyers were an Auckland family who planned to live in the 261sq m home and their children would attend local schools.
The $1.6 million price tag was a new record for Hobsonville Pt, where 3000 new properties will eventually be built, with at least 20 per cent priced in the "affordable" range. The suburb's previous record was $1.49 million for a new standalone house.
The bungalow sits on a 1160sq m section and is one of 10 former RNZAF homes being refurbished and sold by development company Willis Bond.
Bayleys agent Clare Ellis said she expected more of the old air force properties would be offered for sale in the next few weeks.
Shirvani Mudaly, 34, and her husband bid on the property yesterday and were disappointed to miss out. Ms Mudaly said: "Everything we see, it just kind of surprises us how much things go for."
The lower quartile house price is the figure below which a quarter of all properties would be priced, and 75 per cent above. Income calculations are based on regional pay figures for working couples aged 25-29, according to Statistics NZ's Linked Employer-Employee Data Survey. Mortgage repayments are calculated using the average of the major banks' two-year fixed rates on a 25-year mortgage. Assumes couples have saved 20 per cent of their after-tax pay for four years and earned interest at the average 90-day deposit rate for their home loan deposit.
