By Greg Ninness

There is good news for first home buyers in Auckland, according to some new additions to interest.co.nz's regular Home Loan Affordability Reports.

For the first time interest.co.nz has been able to produce separate Home Loan Loan Affordability Reports for the fast growing districts of Rodney, Papakura and Pukekohe on Auckland's northern and southern flanks, and these show that housing is still affordable for first home buyers in two out of those three areas.

The reports have had a major makeover to better reflect movements in the housing market. This includes the new reports to show affordability trends in the areas where much of the supply of new housing is expected to be built to cater for the region's rapid population growth.

Another major change to the reports is that all of the affordability calculations in them are now based on 30 year mortgage terms, rather than the 25 year terms previously used.

The move to 30 year terms reflects changes in buyer behaviour and a general trend towards longer mortgages as a result of rapidly rising house prices, particularly in Auckland.

The Home Loan Affordability Reports measure how much of their weekly income a typical first home buying couple would need to set aside to meet the mortgage payments on a lower quartile-priced home in 40 cities, regions and districts throughout the country.

The reports assume first home buyers in each area are a couple who are both aged 25-29 and working full time for the median rate of pay for people their age, and they have been saving 20% of their net income for four years to use as a deposit.

The affordability benchmark used in the reports is that housing is affordable when the mortgage payments take up no more than 40% of take home pay.

Any more than 40% is classed as unaffordable.

Pukekohe is Auckland's most affordable district & even Auckland Central scrapes in

On that basis, Pukekohe is easily the most affordable district in Auckland, with the mortgage payments on a home purchased at the district's lower quartile price of $491,500 taking up just over a third (33.9%) of a typical first home buying couple's take home pay, well below the 40% affordability limit.

That is followed by Papakura, where the mortgage payments on a house purchased at the district's lower quartile price of $549,500 would take up 38.5% of a typical first home buying couple's take home pay.

And a surprising addition to the affordable list under the reports' new format is Auckland Central, the area of the Auckland isthmus falling within the boundaries of the former Auckland City Council before it merged with its neighbours to form the super city.

This includes many of Auckland's most expensive suburbs and is an area which has shown some of the strongest price growth over the past few years.

Yet the mortgage payments on a home purchased at the district's lower quartile price of $644,400 would take up 39.6% of a typical first home buying couple's take home pay, putting Auckland Central into the affordable category by the skin of its teeth.

The reason for Auckland Central's apparent affordability for first home buyers is to do with the make up of its housing stock and the higher wage rates prevalent in the district.

Auckland's central isthmus contains most of the region's apartment stock and many of these are so-called shoe box apartments that were mainly built as student accommodation prior to 2009.

The market for these types of apartments has been extremely buoyant, as investors chase them for the high rental yields they can provide relative to other residential properties, although younger owner-occupiers have also been showing interest in this market as more traditional forms of housing get priced out of their reach.

And in many Central Auckland suburbs such as Mt Eden and Mt Albert you are likely to find blocks of older-style home units sitting cheek by jowl with million dollar-plus villas, although even these are now likely beyond the means of most first home buyers.

The areas also contains most of the city's leasehold properties, which would drag down its average prices.

Wage rates also tend to be higher in Auckland Central than other parts of the Auckland region, and that combined with a greater mixture of housing types has improved affordability for first home buyers in the district, although it may not be long until it passes the 40% threshold into unaffordable territory.

South, West & North unaffordable

However the areas immediately surrounding Auckland Central fall squarely into the unaffordable camp, with the mortgage payments on a lower quartile-priced home taking up 47.1% of a typical first home buying couple's income in Auckland South (Manukau), 44.6% in Auckland West (Waitakere), 48.7% on the North Shore and 42.1% in Rodney.

The reports highlight the stark choices facing Auckland's aspiring typical first home buyers in the current market.

Either be prepared to purchase on the very southern fringes of the region and accept the frustrations of a daily commute on Auckland's over-stretched transport system if you work outside of your home district, or buy a potentially tiny apartment in the CBD that a few years ago would only have been considered suitable for student accommodation.

Outside of Auckland the only other centre where housing is unaffordable for first home buyers is Queenstown, where the mortgage payments on a lower quartile priced home would take up 45.1% of a typical first home buying couple's take home pay.

The reports show that housing remains well within affordable limits for typical first home buyers in all other centres.

In Hamilton the mortgage payments on a lower quartile-priced home would take up 24.7% of a typical first home buying couple's take home pay, in Tauranga it would be 29.1%, Wellington City 23.3%, Christchurch 23.4% and Dunedin 15.7%.

The most affordable city in the country is Whanganui where the mortgage payments on a lower quartile-priced home would take up just 8.1% of a typical first home buying couple's take home pay, followed by Invercargill at 10.6% and Gisborne at 11.7%.