A first home buyer expert says people are having to take a different view to home ownership as a result of the current difficulties in the housing market.
It was a record year for the property market in 2021, New Zealand's average house price exceeded $1 million for the first time.
According to property data company CoreLogic's House Price Index, the year finished with the average price at $1,006,632 and record-breaking annual market growth of 27.4 percent.
This surpasses the previous record of 24.4 percent set in 2003.
First Home Buyers Club director Lesley Harris told Morning Report the current housing market is incredibly tough for people in both major cities and the provinces.
"I think we've known it for a long time... we don't want to underplay how incredibly challenging it is. Having said that, we are still seeing people get into their first homes but there's a lot of compromises being made."
She said some of these compromises included people purchasing houses in groups, bringing in boarders and buying property in the outskirts of major centres.
"Kiwis are hellbent on getting into their first home and they will do whatever it takes to actually make that move," Harris said.
Although houses tended to be cheaper in provincial areas, the lack of high paying job opportunities in these regions could make them an untenable option for many first home buyers.
"You've got to consider that you do have to live and earn income so generally in those provincial areas there's not as much opportunity for the higher paying jobs so it's not as easy as it sounds.
"We're only seeing it get tougher and people are getting very frustrated."
Recent changes to the Credit Contract and Consumer Finance Act had made it even more difficult for first home buyers to get a loan from the bank, she said.
As a result, banks were now placing extra scrutiny on the spending habits of prospective first home buyers.
Harris said it was now even more important that first home buyers clear their debts and tone down their spending prior to applying for a mortgage.
"People need to understand that if you've got $9000 worth of debt, student loans are looked at differently, but $9000 worth of debt which in our recent survey was the average, is going to reduce what you can borrow by $70,000."
RNZ
