First-home buyers should have no trouble getting a house anywhere but Auckland, the new AMP360 Home Affordability Report says.
Auckland is the problem child for first-home buyers but there are significant differences in affordability. Queenstown is only marginally affordable.
The AMP360 report makes adjustments for regional differences in both dwelling selling prices and income levels.
When those regional differences were taken into account, all regions of the country remained below the affordable threshold - except Auckland.
The most affordable region in the country for first-home buyers was Wanganui, where the mortgage repayments would take 8.6% of income.
Other cities, such as Tauranga (26.8%), Hamilton (24%), New Plymouth (26.8%), Napier (23.3%), Wellington (30.1%), Nelson (26.4%), Christchurch (30.9%), Dunedin (21%) and Invercargill (11.3%) all remained well below the 40% of net income affordability threshold.
However, Queenstown, where the mortgage payments on a lower quartile-priced home would be 39.3% of the median take-home pay, only just scraped below the 40% affordability threshold and was the most expensive place for first-home buyers outside Auckland, the report said.
In Auckland, the lower-quartile house price was $554,500 in February and the median take-home pay for a 25 to 29-year-old couple would be $1537 a week.
The mortgage payments required to buy the home would be $733 a week, eating up 47.7% of their take-home pay. That would leave them with $804 a week between them to pay for everything else.
The report said paying that much of your income to cover your accommodation costs was a concern, for two reasons.
Mortgage payments were only one of the costs home owners faced and when other costs such as rates, insurance and maintenance were factored in, first-home buyers would probably be paying out well over half their take-home pay on housing.
It also left them vulnerable to financial shocks, such as an increase in mortgage interest rates or a reduction in income.
''If any of those things happened, the first-home-buying couple could find themselves in serious financial difficulties.''
