KEY POINTS:
Would-be homeowners in our three main centres are likely to have to wait at least 14 years to buy an average house under strict new mortgage rules.
New Zealand's largest banking group ANZ-National last week announced it was doubling its minimum mortgage requirements to a 20 per cent
deposit.
The Herald on Sunday calculated how long it would take to save that much, for people on average incomes trying to buy homes at the median sale price in Auckland, Wellington and Christchurch.
Presuming they can save 10 per cent of their gross $950 weekly salary, Aucklanders needing an $86,600 deposit for a $433,000 home would be waiting 911 weeks or 17.5 years.
Wellingtonians earn an average $1006 a year, meaning they would have to wait 733 weeks, or more than 14 years, to save the $73,800 deposit needed for a $369,000 home.
In Christchurch, it would take roughly the same amount of time to save the $62,000 deposit needed for a $310,000 home for those earning the average $848.60 a week.
John Bolton, from mortgage brokers Squirrel, said the 20 per cent deposit would crush the hopes of many trying to buy their first homes.
One client chasing a mortgage texted him on Thursday after hearing about the change in requirements: "It's just too hard for me now. Don't worry about it."
Bolton said the move was a response to the market conditions and risk of unemployment but he remained confident of securing loans for people with a 10 per cent deposit if they had a good savings history and no personal debts.
His advice for people wanting to buy their first home was to rent while saving as much as possible and to avoid personal loans and hire purchases.
"Give it 12-18 months and, if the sky hasn't fallen, the banks will start to loosen criteria again."
Financial adviser and author Lisa Dudson said the 20 per cent minimum deposit was standard practice five or six years ago.
She advised potential buyers to save, stay away from consumer debt and wait for house prices and interest rates to plunge further.
Dudson said the move towards bigger deposits was no bad thing. It had been too easy for people to borrow large sums leaving some people saddled with huge debts.
National claimed affordable housing as one of its key election promises. John Key's plans included personal tax cuts, keeping interest rates down, allowing state house dwellers to buy their homes, reforming development rules to free up land and changing building regulations.
Housing Minister Phil Heatley said yesterday the key to making housing affordable was increasing take-home pay through tax cuts and reduced interest rates.
The Government was looking closely at areas of state-owned land for the Gateway Housing programme, a two-step scheme that would allow first-home buyers the use of a leased section for up to 10 years.
They could use that time to build and pay part of the cost of the house and would then have the option to buy the land.