The AMP360 reports found the median income for the typical Wairarapa buyer - assumed to be in the 30-34 age-group - was not high enough to buy a median-priced house.
The AMP360 reports found the median income for the typical Wairarapa buyer - assumed to be in the 30-34 age-group - was not high enough to buy a median-priced house.
Home loans for property in Wairarapa are considered too much to handle for an individual home buyer, a report has revealed.
The AMP360 reports found the median income for the typical buyer - assumed to be in the 30-34 age-group - was not high enough to buy a median-priced house.
The report estimated that in January a typical home buyer would have to put aside 52.2 per cent of a median income to pay the mortgage on a median priced house in Wairarapa - down from 55.9 per cent in January 2014. A mortgage is considered "affordable" when the payment is no greater than 40 per cent of household weekly take-home pay.
The report - which took into account the median house price, weekly take-home pay and disposable pay - also looked at the affordability of a home loan when two adults were working.
Based on a profile of one adult working full-time, one working half time and a child of 5, the data showed 32.4 per cent of the take-home pay would need to go towards the mortgage for a median property in the area.
Wairarapa mortgage broker Geoff McIvor said 40 per cent of weekly take-home pay was too much to put towards servicing a mortgage, even though it had been deemed sufficient by AMP360.
"It all depends on people's ability to pay but I would have thought that 40 per cent is pretty high.
"If people are forking out 40 per cent of their income to put towards servicing a mortgage, that would make life very difficult and tough for them.
"You need to get your servicing costs down to 30 per cent or even lower of your salary.
"Obviously with the lower interest rates at the moment, banks are allowing people to borrow more but they shouldn't be forking out more than 30 per cent on mortgage payments."
Mr McIvor said it was still feasible to buy a house in Wairarapa, however.
"The big question is what people are earning. You have to look at the income that people are generating down there and a lot of people in the Wairarapa who travel backwards and forward to Wellington are on quite a good income so they can afford to pay a bit more," he said. NZME.
