House-hunting singles forced to compromise

The average single might not immediately think of home ownership as a key potential benefit in hooking up with a significant other.

But while it’s not a very romantic proposition, new data shows that for many people, finding someone they can tolerate enough to share a 30-year debt with may be key to whether they ever own the roof over their heads.

Figures from financial comparison website RateCity.com.au show that Invercargill is now the only city in New Zealand that could be considered ‘‘affordable’’ for a single person.

There, an annual income of $38,352 is required to service the mortgage on a median-priced house.

Across the country, the average household income required to service the mortgage on a median-priced house is $76,720.

That would allow the buyer to remain within traditionally accepted affordability measures of no more than 30 per cent of income going on housing costs.

But it compares to a median income for full-time workers of about $51,000.

In Auckland, earnings of $158,731 a year are needed to comfortably service the $3968 monthly repayments on a mortgage for a median house price. The median Auckland income is $630, according to Statistics NZ.

Hamilton buyers would need just over $90,000 a year for their $2265-a-month mortgage bill and Tauranga just under $100,000.

In the capital, you would need to earn $7050 a month to avoid mortgage stress, and in Christchurch just $6663. But the median incomes there are just $703 and $637 a week, respectively.

Even traditionally more affordable areas such as Rotorua and Whangarei require annual income of $59,639 and $64,226, respectively, to avoid mortgage stress.

Last year, 34.6 per cent of all sales in Auckland were purchased with one person on the title.

The figure is lower in the rest of the country – at 31.4 per cent solo buyers.

Having two people on the title is the most common form of ownership – 55 per cent in Auckland for 2015 and 57.9 per cent around the rest of the country.

Data insights director Peter Arnold said the cost of servicing a mortgage put the dream of owning a property well out of reach for the average buyer.

‘‘First-home buyers will be forced to look at alternative ways to break into the property market, particularly if they’re doing it on their own. This may mean teaming up with friends or family to secure a home, or taking on a second job to supplement your income,’’ he said.

Jeremy O’Hanlon, spokesman for Homes.co.nz, pointed to the deposit required as another hurdle. In central Auckland, buyers now need almost $200,000 before they can even start shopping for a house. In Wellington, they have to pull together $110,000 and in Christchurch, just under $74,000.

Mortgage broker Bruce Patten said he still saw plenty of single people applying for mortgages. They were often pairing up with friends or family, or looking at apartments.

Glen McLeod of Edge Mortgages agreed units and apartments were becoming a more viable option for single buyers. They usually tapped into their KiwiSaver accounts to help with the deposit, he said.

Others were looking outside Auckland for cheaper houses in smaller centres. ‘‘Even though their incomes might be good, when you put the maximum loan amount they can get against their deposit, they can’t buy in the areas they would like to.’’