14 years on, family still saving to get deposit

Noel Oelofsen wishes banks would take into account employment history and money managing skills when assessing home loan applications. Photo / Peter Meecham

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World-Class Auckland: How to make houses cheaper

When Noel Oelofsen emigrated from South Africa he planned to buy his own house to give his family financial security.

Fourteen years on he is in his sixth rental property and still trying to scrape together a deposit. He hopes to move into his own home within 12 to 18 months - but only if the Reserve Bank's 20 per cent minimum deposit rule is relaxed.

The 49-year-old qualified engineer and production manager says he and his wife could afford mortgage repayments on their earning power. The problem has been raising the huge down-payment required by banks - more than $100,000 for a $550,000 property considered "affordable" in this market.

"That's a hell of a lot more than a year's salary for me and who can save that amount when you're starting from scratch?"

The restriction is keeping the wrong people out of home ownership, he says. "It's the investors and some of these guys who walk into the country with cash in hand that drive the prices up."

Now living in Flat Bush, Mr Oelofsen believes it would be fairer for banks to consider people's employment history and money management skills when deciding loan applications rather than how much deposit they can put down.

Although it is possible to get a loan with less than 20 per cent deposit, it limits your bargaining power, he says. Low equity house-hunters are also hit with penalty risk payments and miss out on the best interest rate deals.

Even with KiwiSaver contributions, Mr Oelofsen remains about $30,000 short of what he requires. But he is still cautiously optimistic about buying a home.

"That's what you build your whole life towards in South Africa - owning your own home and by the time you retire you're mortgage-free. We'll be a lot happier when we're there, even though I'll probably have to pay it off over the next 30 years. I'll probably have to work till I'm 100."