It takes Aucklanders on an average weekly income a punitive 16 years of hard slog to save for a house, new research from the Real Estate Institute has revealed.
"The average Auckland household looking to purchase a house that costs $670,000 - the price that 25 per cent of the houses in Auckland fell below - may have to save for 832 weeks, exactly 16 years, in order to have a $134,000 deposit for that property," REINZ said this morning.
The figures are based on an average weekly income, weekly tax payments and average weekly expenses required by couples in our largest city. REINZ then calculated any weekly surplus left over.
It only takes Cantabrians four years to save their weekly surplus and get a $69,500 deposit for a lower-quartile house priced at $347,500, the research showed.
"Wellingtonians face a more positive situation with it taking 159 weeks (just over three years) to save the $82,000 deposit for a lower-quartile house priced around the $410,000 mark," REINZ said.
Bindi Norwell, REINZ chief executive, said: "We all know saving for a deposit in Auckland is hard, but this research proves that it is a staggering amount of time for people to be trying to save for a deposit for a house – especially when they're currently renting. The worst part of this situation is, that by the time they've saved the money, the goal posts are likely to have moved as house prices have only gone in one direction over the past few years. If someone is on their own, then you're effectively talking about doubling the amount of time it would take to save a deposit.
"This research comes not long after the Government has revealed that home ownership is at a 60-year low* and could fall even further in the future. This is why REINZ has repeatedly called for LVRs to be eased for first-time buyers as saving a 20 per cent deposit is just too difficult. While the Reserve Bank announced that from 1 January 2018 that banks could now lend above the LVR ratio to 1 per cent of owner occupiers [up from 10 per cent], we still don't think this has done enough to help first-time buyers onto the market," she said.
"While much has been made in the media of telling young people to stop eating smashed avocado on toast and to stop buying $5 coffees, the reality is that when they're going to be saving for 16 years the odd brunch out here and there feels like it is well deserved," she said.