Mortgage struggle | Manawatu-Wanganui News | Local News in Manawatu-Wanganui

Housing affordability in Wanganui looms as a double-edged sword.

The latest Roost home affordability data shows that while the district has the most affordable homes in the country, the issue for local home owners is mortgage payments that come out of their take-home pay.

The figures for October show that buying a median-priced home in Wanganui will take 25.5 per cent of the median take-home pay in Wanganui and that has this area sitting at the lowest point compared to major cities and towns around the country.

This percentage figure is below the 32.8 per cent required in September and 31.2 per cent in October last year. Five years ago the mortgage payments were eating up 47.7 per cent.

Rhonda Maxwell, spokeswoman for mortgage broking company Roost, said the median house price in Wanganui last month was $150,000 - a significant drop from the $192,500 in September. It also signals a 10.7 per cent drop in the median price from October 2010.

The median weekly take-home pay for a typical buyer was $681.45 last month, and that is $26.45 up on the take-home pay a year ago. In 2007 the median after-tax pay packet in Wanganui was $554.79.

Ms Maxwell said this means the median income of a typical buyer in Wanganui is not high enough to buy a median-priced home, even if they provided a 20 per cent deposit.

However, the researchers said this may not preclude them from looking at cheaper properties on the market.

"It's also true that a family or couple, with more than one income, may find a median-priced house is affordable," she said.

Drilling further into median net pays, Ms Maxwell said after mortgage repayments had been taken out, it left a weekly disposable income of $507.77. And while this is more than $57 higher than it was in October last year, the typical buyers' income was just too low by itself to comfortably afford mortgage repayments on a median-priced home.

"Based on our standard household profile, it now takes 16.1 per cent of the median take-home pay to service a mortgage on median-priced home purchased in October in Wanganui," she said.

The profiling used by the research company assumes the household includes one adult male aged 30-35 working fulltime, an adult female aged 30-35 working part-time and a 5-year-old child that receives Working-for-Families benefits.

Nationally, Roost said it now takes 52 per cent of one median income to pay the mortgage on a median-priced house purchased in October,

The affordability index reached its highest point of 83.4 per cent in March 2008. The median house price was sitting at $359,000 last month. She said a bright spot was the more solid outlook for low interest rates.

"Banks remain very competitive and the potential for further falls in fixed and floating mortgage rates is strengthening the appetites of home buyers," Ms Maxwell said.