Nearly three-quarters of recent buyers said their homes needed some work, with 28 per cent needing substantial renovation. Photo / Dean Purcell
Nearly three-quarters of recent buyers said their homes needed some work, with 28 per cent needing substantial renovation. Photo / Dean Purcell
In the final of a three-part series, a survey of 1000 buyers reveals how houses fall far short of their aspirations.
Entry-level Auckland home buyers are opting for older houses on smaller sections in need of considerable DIY work, but are less likely to purchase stand-alone properties.
And while more financially strapped first-time buyers are opting for apartment living, the three-bedroom house less than 20km from the central city is still the dream - much as it was for their parents.
A survey of more than 1000 Auckland home buyers carried out by the city's biggest real estate firm, Barfoot & Thompson, highlights the changing characteristics of buyers' first properties as their expectations are forced to evolve amid soaring prices and a shortage of stock.
The research, provided exclusively to the Herald, compared the buying experiences of recent first-home buyers (2010-2015) with those of their parents' generation who bought before 1980.
According to the survey, people are now buying older properties because of a lack of new housing stock, with many homes in need of costly renovation.
Before 1979, 51 per cent of first-time purchasers bought a new or near-new home, compared with 27 per cent today.
The breakdown of those buying "off the plans" is even more pronounced - 28 per cent before 1979 compared with just 6 per cent today.
Nearly three-quarters of recent buyers said their homes needed some work, with 28 per cent needing substantial renovation. Less than half of those bought before 1979 needed work, and only 17 per cent needed major reconfiguration.
Today's buyers also get much smaller sections for their money.
Most pre-1979 sections (71 per cent) were at least 600sq m. Today 62 per cent are smaller than 600sq m, with 35 per cent under 400sq m.
Meanwhile, more buyers are opting for apartments as their first home, accounting for 8 per cent of the first-time buyer market since 2010, compared with 4 per cent the previous decade and just 1 per cent in the 1990s.
Across generations, the standard three-bedroom detached home less than 20km from the central city remains the most popular buy. However, people are less likely to live in a stand-alone house (88 per cent before 1979 compared with 75 per cent today) as units, townhouses and apartments become more palatable and the quarter-acre dream becomes financially out of reach.
Loan Market mortgage adviser Bruce Patten said most larger plots of land had been snapped up by developers and subdivided.
"You just can't find a decent section size now. Anything that's dividable into three sites is over $1 million."
Mr Patten said the three-bedroom house dream was becoming a thing of the past for first-home buyers, who were opting for units or apartments.
He said the Reserve Bank's LVR limits on low-deposit lending should be relaxed for those buying apartments to help more first-time buyers.
Barfoot managing director Peter Thompson said new-build homes were unavailable today for less than $650,000-$700,000. "The cost of building has pushed prices up."
Older properties were attractive to many first-time buyers because they could add value and pay their mortgages quicker.
Mr Thompson did not believe people were being priced out of affordable stand-alone homes, which were still available in South and West Auckland. "It is hard, I'm not going to deny that. But there's opportunities out there for people to get into their first home."
The Barfoot & Thompson First-Home Survey, conducted by TRA, questioned 1019 Aucklanders about their first-home purchase. The margin of error is 3.1 per cent.
'My goal is four homes before 30'
At 27 years of age, Alana Auvaa already owns two investment properties but has ambitious plans to single-handedly expand her burgeoning portfolio.
"My goal is to purchase one every two years. I want four properties by [the age of] 30."
Miss Auvaa bought her first two-bedroom home in Papakura in 2012 for $295,000 after scraping together a $20,000 deposit with the help of her family.
Alana Auvaa, 27, stands in front of her first home in Papakura, which she purchased in 2012. She has since bought another property and plans to buy more. Photo / Nick Reed
"My parents were always buying and selling real estate and doing up properties so I thought, 'I should do it myself'."
She initially lived in the home with a flatmate who helped her afford the mortgage repayments, before moving out to live with her partner on his family's Karaka farm and tenanting her Papakura investment.
"It was easier than I thought it was going to be," she said of her first home purchase, "as long as I got a flatmate in."
Miss Auvaa admitted it would probably be easier for a couple to get into their first home by combining their financial resources, "whereas I was paying the mortgage by myself".
The executive assistant purchased her second property last year, another Papakura two-bedroom house which she bought at auction for $359,500.
She paid a $35,950 deposit with assistance from her parents.
"It was tough and it was scary too," she said of the auction process.
