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New Zealand

Wellington housing market: $171k for a deposit in 2021

2 minutes to read
Wellington's first-home buyers have seen a steep increase in desposit requirements. Photo / Mark Mitchell

Wellington's first-home buyers have seen a steep increase in desposit requirements. Photo / Mark Mitchell

NZ Herald

First-home buyers in the capital now need to fork out $171,000 for a deposit on a house, new data has shown.

In research conducted by OneRoof.co.nz, released today, Wellington had the sharpest increase in the country, with house deposits jumping $43,000 in the past 12 months.

OneRoof editor Owen Vaughan said "the post-lockdown surge" had hit Wellington's first-home buyers particularly hard.

"While the cost of servicing a mortgage has never been lower, deposit requirements have never been higher," he said.

"The path to home-ownership is particularly steep in Wellington. Median house prices in the city have broken the $1 million barrier – way above what the Government believes is affordable.

"Compare that to the situation in Christchurch, where first-home buyers in the city would typically only need a $107,000 deposit - up just $27,000 in the last 12 months."

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The figures were calculated by using the 20 per cent deposit needed for the current median property value in each region, and comparing this to the median value this time last year.

Across the country, deposit requirements were at $153,000, growing $28,000 in the past 12 months.

New head of OneRoof.co.nz, Paul Mayer, said they hoped the research could inform first-home buyers of what they were getting into.

"In a rapidly changing market, driven by low interest rates and fear of missing out, it's more important than ever to know what is exactly happening," he said.

"We conducted this research to illustrate the challenges many buyers are facing right now and to inform and support them in the biggest financial decisions they will make."

"While the rise in prices will frustrate many first-home buyers, it does show the benefits of getting onto the property ladder as a long-term investment."

While Wellington had seen the steepest climb in deposits, first-home buyers were least affected in Invercargill and Queenstown.