Auckland housing is now the most unaffordable it has been for first home buyers since Interest.co.nz began collating house price and household income data for their Home Loan Affordability Reports in January 2004. A typical Auckland first home buying couple earning the median wage for their age group now need to set aside more than half of their after-tax income to meet the mortgage payments on a lower quartile-priced home.
• CEO of Westpac NZ David McLean has stated that Westpac NZ’s typical first home buyer is aged between 25 and 34, their average loan size is $330,000, their average deposit size is $120,000, only one on five have less than a 20% deposit, and 78% of them have a loan-to-value ratio of less than 80%.
• Westpac New Zealand’s “not terribly concerned” that Auckland first home buyers could potentially need 60% to 70% of their income to service their mortgage if interest rates rise to 7.5%.
• Prime Minister Bill English said the government has been concerned “for some time” about the risks rising interest rates would have for mortgage holders already near debt-servicing limits.
• Greens co-leader Metiria Turei stated that “The Reserve Bank told the Government that an Auckland family earning $100,000 a year is potentially going to have to spend 60 to 70% of their income servicing the mortgage on their first home in the next year or two.”
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