Key Facts:

– A report predicts that the average Auckland house price deposit will reach $1 million by 2045.
– First home buyers are finding it increasingly difficult to save for a deposit.
– Financial services platform Area suggests that alternative ways of saving need to be considered.
– The Area Time-To-Deposit Index uses data on household income averages, expected interest earnings on savings, house price growth rates, and median house prices to calculate deposit requirements.
– With net migration increasing, the demand for homes continues to outstrip supply.

Article Summary:

According to a report shared exclusively with 1News, first home buyers in Auckland may find it impossible to save for a deposit for an average priced home. The report predicts that the average Auckland house price deposit will reach $1 million by 2045. This has prompted some potential buyers to consider alternative investments, such as shares or managed funds, rather than pursuing home ownership.

Financial services platform Area suggests that hopeful buyers need to think differently and find alternative ways of saving, as saving for the average priced house solely through hard work is becoming mathematically almost impossible. Area founder Derek Handley recommends increasing deposits exponentially, as the cost of homes continues to rise. The report is based on the Area Time-To-Deposit Index, which takes into account factors such as deposit size, savings rate, income growth, and the evolving 20% deposit target.

With net migration reaching 110,000 and demand for homes continuing to exceed supply, it is clear that innovative solutions are needed to address the housing affordability issue. One such solution is the launch of an investment fund by Simplicity Living, aimed at developing and operating housing and offering low-cost mortgages. The fund allows investors to make money while contributing to a solution for the housing crisis.

In conclusion, the report highlights the growing difficulty for first home buyers in saving for a deposit for an average priced home in Auckland. Innovative approaches and alternative ways of saving are needed, given the high deposit requirements. With the demand for homes outpacing supply, it is crucial to find solutions that address the affordability challenges in the housing market.

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