A leading economist has outlined the dire state first home buyers are facing in the property market.
It comes after CoreLogic released its 'Mapping the Market' report on Thursday, which showed 486 suburbs had seen their annual median value decrease over the past three months.
The new figure is almost double what it was in the previous three-month period, where 246 suburbs fell in value.
Infometrics compared the total payments made by homeowners over the lifetime of their mortgage against the value of the property when the loan was repaid to calculate the net financial gain.
Infometrics chief forecaster Gareth Kiernan told AM on Thursday it's the worst time in 65 years to be a first home buyer.
"House prices have risen so far that you need a big deposit to get into the market and the risk is over the next 25 years you are devoting a massive proportion of your income to actually servicing that mortgage," Kiernan told co-host Ryan Bridge.
"This means you not going to have a lot of money spare left over for other things and the risk is at the moment as we see house prices fall, you could be paying too much for property so your not going to be enjoying the capital gains and the price appreciation that previous generations have as well."
Kiernan told AM an affordability crisis has been building for the last 30-40 years.
"We saw through 2020/2021 with mortgages starting to fall down to below 2.5 percent, that house prices responded to that and people said, 'I can service a larger mortgage because interest rates are so low,'" Kiernan said.
"But that's not the main part of the story - the affordability crisis has really been building for 30 or 40 years as house prices have continued to run well ahead of incomes - meaning it's just got more and more unaffordable for people trying to get onto the ladder."
Kiernan said there is a "real risk" for people buying property at the moment.
"It's just the share wait of the numbers, at the moment house prices in Auckland have fallen 11 percent over the last six months - so there is a reversal going on as interest rates have started to rise.
"The real risk is if you are looking to buy now, you pay too much and you could be paying less in 12-24 months."
Record house prices and the limited further potential for growth will see a third of buyers' income tied up in mortgage repayments for the next 25 years or longer.
Kiernan warned it's a terrible time to be a first home buyer as people essentially sign themselves up for a lifetime of debt.
"The thing about buying in 1987 with those interest rates of 20 percent, inflation was also high at that point in time, so your income rose pretty rapidly," Kiernan explained.
"By the time you were finished paying off your mortgage, it was taking less than 10 percent of your income to meet that mortgage. When we look forward from here for a current buyer in 2046, they could still be paying 22 percent of their income - more than twice as much as your parents and certainly worse than your grandparents as well.
"So in my view, it's definitively worse for your current first home buyer."
Kiernan said even though it's a terrible time for first-home buyers, some are still getting onto the ladder.
About 20 percent of the market is first home buyers, which Kiernan puts down to people's life situations.
"If you are a first home buyer and you are choosing to try to get into the property market, it's often dictated by your age, your stage of life and there are lots of other things that affect your housing decision," he said.
"So we are not saying for first home buyers, 'Don't try to get into the market.' Sure, over the next couple of years the prices may change - but the reality is people are going to buy property anyway.
"The unfortunate thing for the current generation of millennials is that it is the worse time but they will still be wanting to settle down, have a family those types of things and homeownership does have a lot of benefits in those regards."
Watch the full interview with Gareth Kiernan above.