The most important word in the New Zealand property market right now is "affordable". Everyone thinks homes should be more affordable, and the Government is under pressure to provide solutions for those who feel shut out of the property market, but what do people mean by affordable?
According to the latest figures from OneRoof and its data partner Valocity, first home buyers in New Zealand typically pay $400,000, although the price point varies depending which city you want to buy in. In Auckland the median value of a first home is $770,000, while in Queenstown it's a staggering $840,000.
Of the main cities, Dunedin is the cheapest place to enter the market, with first homes typically selling for $410,000, but buyers are finding homes for as low as $260,000 in Whanganui.
Lesley Harris, of the First Home Buyers Club, says anything under $800,000 would be considered affordable for Auckland.
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“It sounds crazy but in Auckland homes in the $700,000 to $800,000 bracket are much sought after by first-home buyers. We also have people buying their first home for as much as $900,000 to $1 million.”
What people mean by “affordable” comes down to income. “Some will argue that $800,000 for a first home is completely unaffordable,” Harris says, adding that there few free-standing homes in Auckland for under $650,00.
Harris, there's a reluctance among many Auckland buyers to move to cheaper regional housing markets because there are fewer high-paying jobs. “People want to be living near where they work and if they can’t afford it, they are continuing to rent until they can afford to buy something in the area,” she says.
Nahidul Islam, who rents in the Auckland suburb of Avondale, anything under a million dollars is affordable and he is willing to pay around $700,000 for a three-bedroom family home. “I don’t think that it’s hard to find a house,” Islam says.
Lorna Perkins, who rents in Titirangi, in Auckland's west, is not as optimistic.
“We have a nice home but it costs me most of my wages. There’s no way I’m ever going to own a home.”
Aucklander Jack Cozart is looking for an apartment in the CBD and says he is putting aside three quarters of his income to save for a deposit.
“It’s hard as. I have to save for five years and live with my mum to be able to save for a deposit.”
Mortgage broker Stephen Robertson, from My Money, says the money first home buyers are willing to invest varies on their income and their spending habits. “When your income goes up, so do your spending,” he says.
Mortgage advisor Mikey Smith says New Zealand homes in the price bracket of $600,000 and $750,000 are considered affordable and there are options in Auckland for that price. “There are definitely good options in Auckland and if you are a couple with medium income of $70,000 to $80,000 you can certainly afford it.”
