Mortgage payments for Auckland's most affordable homes are costing first-time buyers nearly half their take-home pay each week, a new report shows.
The AMP360 Home Loan Affordability report, released yesterday, identified young couples, aged 25 to 29, as being worst off in New Zealand's largest city - even after they made it on to the property ladder.
Those in Wanganui were best-placed, with less than 10 per cent of the median income for couples needed to cover mortgage payments for a cheap home in the town.
The report rated a home loan as affordable if 40 per cent of the median income of a young couple covered mortgage repayments for the median price of a home in the city or region they lived in.
Sales data from the Real Estate Institute of New Zealand was used to identify the median house price of the cheapest 25 per cent of homes.
In Auckland, couples needed 47.7 per cent of their take-home pay to cover the mortgage on a $554,600 house - the median price of the cheapest 25 per cent of homes sold in the city in February.
In Wanganui - the most affordable place for a home - only 8.6 per cent of a couple's income was needed to service a mortgage for a median home.
Stuart Wills, a mortgage adviser for Mortgage Link Auckland, said many young couples in Auckland had to think "outside the box" when buying a first-home.
"We get a lot of people who decide to buy an investment property instead of a home just to get into the market, because that way they can stay living in the suburb they want to be in," he said.
Other options included buying out of town and commuting. For example, people who worked in Manukau could buy in Huntly, Mr Wills said.
"We have a few people who will buy it [a first home] with their parents and their friends."
Auckland couple Juanita Fuatavai and Jeremy Tiumalu - aged 26 and 27 respectively - bought their first home with the help of their parents in 2012.
The couple, who have been married for nearly two years, effectively took a loan from Ms Fuatavai's parents to purchase their two-bedroom Waterview property for $394,000.
Each week, $460 of their combined take-home pay of about $1800 goes towards the mortgage, Ms Fuatavai said.
"I'm really pedantic with our spending ... so we know our main costs every month."
The couple also picked up any extra work they could find, such as odd-jobs or coaching gigs, so they could boost their income, Ms Fuatavai said.
Realestate.co.nz, which releases its sales figures for March today, said asking prices in Auckland and Canterbury remained high.
"With the slight fall in the number of new listings in March, sellers are in a good position to maximise the value of their homes," chief executive Brendon Skipper said.
Meanwhile, a scheme doubling KiwiSaver grants for first-home buyers purchasing a new build property - while on a moderate income - kicks in today.
The scheme means an Auckland couple, who have been contributing to KiwiSaver for five years, and are earning less than $120,000, will be entitled to a $20,000 grant - as long as the property is below the cap of $550,000.