KEY POINTS:
The housing affordability crisis in New Zealand could see a generation of angry young Kiwis unable to ever afford a home, the author of a new survey says.
The survey shows homeowners in Auckland now need more than twice the average weekly wage to pay off their mortgages,
with a mortgage on a median-priced house - $445,000 - now sucking up 93.7 per cent of an average Aucklander's weekly pay, up 16 per cent on the previous year.
That means a couple or family would need to earn at least $1748 in take-home pay to comfortably afford mortgage repayments.
David Chaston, publisher at JDJL, which compiled the research, said "affordability" equated to less than 40 per cent of weekly income going on house payments, something that just four years ago was the norm.
To return to that level, house prices would have to fall by 40 per cent or incomes increase by 60 per cent, he said. "And both of those are not realistic. It's not going to happen."
It was likely to create an angry generation who would never own their own homes.
"They will be renters for the rest of their lives. It's hugely sad and it's not good for the social fabric of New Zealand," said Chaston.
Nationally, the survey revealed that although there was a mild improvement in affordability in many regions over the past month, households still need to earn $1373 a week, 23 per cent more than last September to afford a median house, priced at $351,000, and double the $618 of five years ago.
First-home buyers fared only slightly better, with the lowest-end homes now taking about 71 per cent of a pay packet.
Along with Auckland, Central Otago was the least affordable region, while Manawatu/Wanganui, Otago and Southland, have the most affordable housing, despite home loan affordability in the Southland region reaching a record 48.2 per cent after an 11 per cent rise in the median house price in September.
"So even in those places where you used to be able to go to get affordable housing it's closing off. The bar is getting higher month by month," Chaston said. Wellingtonians now spend 79.6 per cent of their weekly pay, just below the national 80 per cent, paying off their home.
The grim news of housing affordability
* It now takes 80 per cent of one median income to pay the mortgage on a median-priced house
* Four years ago it took 43.2 per cent (a reading above 40 per cent is considered unaffordable) and one year ago 67.9 per cent
* The median house price in September was $351,000. In Auckland it was $441,000 and Wellington $380,000
* The median house price in Auckland is now 11 times the median income. (An affordable home is considered one that costs less than three times the before tax take-home pay)
* The median weekly take-home pay for a typical buyer was $736 in September, up $30 on 2006, while the average interest rate for a two-year fixed mortgage was 9.113 per cent, 108 basis points higher than one year ago.