By contrast, many studies around the world consider buying a home comfortable when buyers spend no more than 30% of their income on mortgage costs.
For that to happen, the Auckland family above would need to earn $273,000 for a median-priced home.
Wellington buyers would need $242,000, while Tauranga buyers would need $239,000 and Dunedin buyers $158,000.
First home buyers would need to earn almost as much in each city to buy comfortably.
Kelvin Davidson, chief property economist with analysts CoreLogic, said the sky-high earnings were another sign of how tough the market can be for buyers.
“If 30% is kind of the affordable income you need and that income is way above what people actually do earn, it illustrates the affordability challenge we have,” he said.
Still, Davidson cautioned against placing too much importance on measures of comfortably affording to buy.
“There’s the difference between what is ideal and what’s reality,” he noted, saying families often stretch themselves much thinner financially when chasing their dreams of owning their own home.
Illustrating the difference between the ideal and reality, Davidson pointed to the table above showing the Herald’s measurement - based on data from CoreLogic, economists Infometrics and the Reserve Bank - of how much income typical Kiwi families put towards buying a house in each main city.
It shows Tauranga is the country’s most unaffordable main city.
Tauranga homes sold for a median price of $893,500 during the second quarter of this year, according to CoreLogic.
That would leave a buyer with a 20% deposit facing $71,760 in mortgage payments over the coming year.
Paying that mortgage would use up 70% of the buyer’s earnings if they brought home a median household income according to Infometrics of $103,000.
By the same measure, Wellington city, with its $905,000 median sale price and nation-leading income of $136,000, is the most affordable main city.
A typical Wellington buyer would spend 53% of their income on mortgage payments.
With cities like Tauranga being so unaffordable for a typical buyer, Gareth Kiernan, chief forecaster with Infometrics, said it was likely many buyers already owned homes and used the equity built up in these to put down bigger deposits on their new houses.
That could help reduce the size of their mortgage payments significantly.
CoreLogic’s Davidson said that while home owners might find some relief as interest rates come down after the Reserve Bank cut the official cash rate this week, a long term improvement in housing affordability would only come about if the country boosted supply by building more houses.
First home buyers are typically paying less for their properties compared to other buyers, CoreLogic’s data shows.
In Auckland, the median sale price paid by first home buyers in the three months to June was $889,000. That is well below the $1.02m typical price paid by all buyers.
Yet even so, a typical Auckland first home buyer still faced a mortgage bill of $71,405.
To comfortably afford that, they would need to earn $238,000 - or $104,000 more than the city’s median household income.
Given the high prices, Davidson said it is likely many first home buyers able to successfully buy in the current market do earn salaries higher than the typical household.
Yet that is not always the case, he said.
Typically first home buyers have been thought of as young couples who may be early in their careers, when their salaries have not yet had time to grow.
To get around that, many first home buyer couples will have two people working and may not have extra costs like children.
They may also be able to lower their mortgage payments by putting in bigger deposits using KiwiSaver accounts or help from the “bank of mum and dad”, he said.
For those first home buyers lucky enough to buy, the table below shows Wellington might be the most affordable place to buy.
It is the city where the median household income is closest to the typical house price paid by first home buyers.