Mortgages 'only affordable for double-income households'

Home loans for property in Hawke's Bay are not affordable for an individual home-buyer, a report has revealed, with two working adults now needed to handle a mortgage.

However, a Hawke's Bay real estate expert says the situation has improved in recent months, particularly for first-home buyers.

According to a report this week from AMP360, the median income for the typical buyer - assumed to be in the 30-34 age-group - was not high enough to buy a median-priced house.

In January 2015, a typical home buyer would have to put aside 52.9 per cent of a median income to pay the mortgage on a median-priced house in Napier - up from 47.5 per cent in December 2014.

In Hastings, to pay off the mortgage on a median-priced house, typical home buyers would have to use 40.7 per cent of their median income - down from 43.7 per cent the previous month.

A mortgage is considered "affordable" when the payment is no greater than 40 per cent of household weekly take-home pay.

The report, which took into account the median house price, weekly take-home pay and disposable pay in both areas said a median-priced house would not be affordable for an individual with a median salary but was affordable if two adults were working.

Based on a profile of one adult working full-time, one working half the time and a child of 5, the data showed, 34.6 per cent of the take-home pay would need to go towards the mortgage for a median property in Napier. A Hastings property would require 26.5 per cent of take-home pay.

Harcourts Hawke's Bay managing director Kaine Wilson said he believed housing in Napier and Hastings was affordable and the market was thriving.

"Our first-home buyers' market has improved dramatically over the last three months so, in terms of saying has it slowed down and the affordability has got tough, that is certainly not what I believe. We have had our best quarter in over 10 years and a lot of that is related to areas that are in the lower-priced properties," he said.

Home loans were affordable for a couple, he said.

"Most banks are only looking at a 30 per cent income ratio, so what a person is earning, they are only going to base a mortgage on what a third of that can repay as well," he said.

The median weekly take-home pay for a typical buyer in Napier was $751.70 in January, up 2.3 per cent from January the previous year. In Hastings, the median weekly take-home pay was $748.47, up 2.3 per cent from January 2014, while weekly disposable income was $443.80 - $29.81 higher than in 2014. NZME.