A study by the Real Estate Institute of New Zealand found that, in order to save a NZ$134,000 deposit for a lower quartile-priced Auckland house, an Auckland household would need to save for 832 weeks – or 16 years.

This is compared to couples living in Canterbury, who have to save for nearly four years, and those in Wellington, who would need to wait just over three years.

REINZ Chief Executive Bindi Norwell says in a press release this was a “staggering amount of time” for Aucklanders to have to save for a deposit.

“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,” Norwell says.

This is the reason REINZ has repeatedly called for loan-to-value ratios (LVR) to be eased for first-home buyers, as saving a 20 per cent deposit is just too difficult, she says.

“While much has been made in the media of telling young people to stop eating smashed avocado on toast and to stop buying NZ$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.”

REINZ says the research looked at an average weekly income, weekly tax payments, Reserve Bank of New Zealand’s 20 per cent LVR requirements, and average weekly expenses.

14 March 2018

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