Many house hunters who say they can't afford to buy a home in Auckland need to give up their Sky TV or expensive cars and just save harder, says a mortgage broker.

John Bolton, chief executive and founder of Squirrel Home Loans, said many people were on good incomes but refused to give up on the latest and flashiest possessions in order to save for their first home.

"You've got to be disciplined. You don't need the $17,000 car ... There's nothing wrong with a $3000 car.

"It's so frustrating when you see people with enough money in KiwiSaver but their ability to save is atrocious. They've got heaps of consumer finance debt. We have to tell them to pay down some of that debt before they buy a house."

Advertisement

Mr Bolton said many people seemed to regard items such as Sky TV as necessities, instead of luxuries.

"I do tell people to do without Sky when it's appropriate. When you go through people's expenditure it's amazing where the money goes.

"People have to learn that borrowing for these things doesn't give them assets. The TV is not an asset. The sound system is not an asset. The new sofa is not an asset. They're liabilities - because the people who bought them didn't have the money to begin with."

Conveyancing lawyer Bruce Dell agreed, saying the first-home buyers' dilemma was a myth. He said he had been selling property in Auckland for 30 years and acted for first-home buyers every week.

"Modern young people do not necessarily want the homes like we did 'in the old days'. They want to go to Bali twice a year; they want to drive a BMW on lease; they want a 42" plasma TV; they want to spend $200 at the bar on Friday night and they want to enjoy their two substantial incomes whilst they are childfree."

Three house hunters, who the Herald has been following for the Home Truths series, replied that they were saving as hard as they could.

"We cannot think about affording the luxury car and Sky TV," said 27-year-old Lovely Garg, who is searching with her husband Bharat, 31, for a $630,000 property on their combined annual income of about $110,000.

"We are driving a normal Bluebird Sylphy car (working in good condition) - keeping in mind if we are buying the $3000 car, the maintenance will be too high and we cannot afford it if the car breaks down."

She said the couple spent 65 per cent of their after-tax income on rent and utility bills and the rest went on basics such as food and clothing.

"We need to think twice if we want to buy something. Money is always an issue for us."

The Herald is following three sets of house hunters struggling to buy a first home in Auckland. We take their circumstances to a panel of property experts; independent economist Shamubeel Eaqub, Quotable Value NZ national spokeswoman Andrea Rush and Home Owners and Buyers Association of New Zealand president John Gray. Today we catch up with our final couple and find out what the experts think they should do.

Gemma Mann, who is trying to buy on a similar price range and income with her husband Mike Alsweiler and their baby Harper, said they carefully budgeted every pay day to cover rent, petrol, weekly food shopping and other expenses.

"Every week we save as much money as humanly possible, and have very little money for ourselves. Despite saving every possible dollar ... we are still not able to keep up with rising house prices.

"I would think that there are a lot of young people out there who are doing the same as Mike and I. I do not think that everyone can be painted with the same brush."

Cecile Bourgeois, a 39-year-old French teacher who is trying to find a $500,000 home on a $74,000 income, said some people had no idea what they were talking about but still thought they could comment.

"I know how to budget and save money, and I have no debts. Still I can't afford a house in an area I like and feel safe in."