Everyone and their hamster has an opinion about first home buyers in the Auckland property market.
Even those who have no freaking idea what they’re talking about. I don’t know why this surprises me. It really shouldn’t.
I may own a house myself but I get SO riled up when this topic comes up. We had a spirited conversation about it at work the other day, and I couldn’t stop thinking about it afterward. Here are my definitive personal thoughts on the matter based on the most frequently asked questions.
Why don’t you just buy an apartment/townhouse?
Banks are tougher on lending when it comes to apartments (especially smaller ones) and then you have to account for body corporate fees.
Apartments and townhouses may have a good reputation for being modern and sought after overseas. Here, they are more synonymous with cheap and nasty. How many apartments/townhouses built in the 2000s here were part of the leaky house epidemic? Not only have those owners had to deal with the costs of fixing their properties, they haven’t seen much (if any) capital gain.
I lived in a neighbourhood where quite a few apartment/townhouse developments sprung up around the same time. I have lived in 3 separate properties in those developments (1 apartment, 2 townhouses). They were cramped, poorly built, with paper thin walls, and ALL OF THEM WERE LEAKY. I didn’t really care as a renter, but I would never buy one to own. In terms of the residents, let’s just say they almost exclusively fell into 2 main buckets and I didn’t love either of those crowds. They have almost become a kind of ghetto in a way, and I believe the same is true in other similar developments around Auckland.
Some of those actual apartments/townhouses can be bought for fairly cheap right now. And I wouldn’t touch them with a barge pole.
What about buying a new apartment or townhouse? Well, I can’t afford them, quite simply. If I did have $700k to spend, I personally would rather buy an older house on more land. As you might have guessed, I’m pretty wary of recent construction in Auckland from my personal experiences. And so many current development projects have been cancelled in the past few months – so if you’re buying off the plans your apartment/townhouse may not actually get built after all.
But a house in my suburb just sold for [dollar figure significantly under the average price] …
Bully for you. Do you understand what average means? Some sell for higher, and some sell for lower. But the average is the average for a reason. (As per previous point – just because something is cheap doesn’t mean you should buy it.)
Everyone expects too much – new houses today are huge!
Yes, new builds today are monstrous McMansions. … but us first home buyers are not really buying them (because we can’t bloody afford them). We are buying 70, 80, 90 square metre houses from the 1960s/70s/80s because those humble do ups are what’s (juuuust) in our price range.
Count yourself lucky – I was paying 20% interest on my mortgage!
And were house prices 8-10 times your household income back then? House prices have ballooned, but incomes have not grown at the same pace. Payments on a $100k mortgage at 20% are still a lot less than a $500k mortgage at 5%.
Why don’t you just resign yourself to renting?
(Oh, I love this one! Let me count the ways…)
Have you ever felt the sheer terror of having to move house because you’ve been given notice to leave? Used up all your goodwill with the boss because you have to keep ducking out of work to go to viewings (because rentals are only ever shown during working hours, unlike open homes)? Applied to countless places only to never hear back because there’s so much fierce competition? Wondered WTF you’re going to do as your last day approaches and you have nowhere to live lined up?
Have you ever opened your wardrobe to find mould growing on your clothes like a rash? Or found a mushroom growing through your carpet?
(Then, my friend, you haven’t truly lived. Let’s swap lives, k?)
Do you dream of owning a pet?
Do you want to have kids, settle down, make a home?
Do you want to decorate, hang things on the walls, paint? Do anything at all to put your stamp on your place?
There is your answer.
(PS – Fortuitously, The Spinoff is running Rent Week right now … a series highlighting just how much renting in NZ sucks. Check it out.)
Tips for Building an Enduring Business