Those leafy central suburbs of Auckland get a lot of press. You know the ones; jam-packed with villas, character homes, swanky new townhouses and apartments. But let's face it, sale prices for an average-size three-bedroom home are often well in excess of $500,000 (that's half a million dollars!!!). The reality is those suburbs are just not an affordable option for many people on an average income, especially those just stepping into the market.
No need to despair as there are many thriving green suburbs beyond central Auckland that offer more affordable options for home buyers. Many offer properties with character features and/or spacious backyards where kids can run around. The latter is something you will increasingly struggle to find in the central areas. Add good schools and great community facilities to this and it makes suburbs further out a good option to consider.
So, what do I mean by affordable? My own quick definition is that a working couple, with a bit of a deposit, who are currently paying rent on a three-bedroom house, could find a property with weekly mortgage payments only a little more than they pay in rent. (Although there are other costs of home ownership, such as council rates and insurance, which you need to include in your budgeting.) There are also potential future benefits you may receive from capital gains in your property. This could occur through a rise in values that outpace general inflation. So, let's call it a cost/benefit trade-off.
This equation unfortunately won't necessarily work if you try to buy where you are currently renting.
An observation from my years of valuing is that many people recognise they can't afford to buy in that nice suburb where they rent. In reality, they know that buying a house there is out of their financial bounds, for the present at least. But if they're willing to consider suburbs slightly further out, values are often more affordable and offer the opportunity for current rent to equal mortgage payments.
