Steph George is living proof that a little sacrifice can go a long way. Photo / Supplied
It has been another busy and interesting year in our region. We revisit some of our most popular premium stories from 2023. Originally published on February 27
Steph George is living proof that a little sacrifice can go a long way when it comes to buying your first home.
At just 27 years old, George has built her first home with Classic Builders in Rotorua.
It took her five years and two jobs, working 70 hours a week, to save up enough money for a house deposit.
George is sharing her story as a CoreLogic Housing Affordability Report reveals it was taking people in Rotorua nearly eight and a half years to save for a deposit on their first home. And once they secured a home, they were spending a “record” 43 per cent on their household income on servicing their mortgage.
The Rotorua woman’s homeownership dream was built on sacrifice, research and hard work.
A youth support worker, George also worked a second job at a local bar. She spent five years saving the 20 per cent deposit required, sometimes working 70 hours a week, and boarding at home with her parents.
But, she said, knowing it was a short-term solution to realising her dreams made it manageable.
“It hasn’t always been easy.”
George was set back a few times by the bank, pushed her KiwiSaver input to the highest contribution level “because if you don’t receive it, you don’t miss it”, paid rent to her parents and kept her outgoings minimal.
“I saved $300 a week.
“I am semi-grateful to Covid just because I wasn’t missing out on going out. I am also very lucky to have been living with my parents at the time.”
In five years, George said she had managed to save between $70,000 and $90,000.
George said, as a young person, it can feel like saving for a house deposit was out of reach.
“It isn’t easy, but it is possible.”
She said being willing to take the short-term pain for the long-term gain can be the step ahead that secures a financial future.
“My mum and dad have always taught us to have goals, and I realised quite early on that it didn’t matter what car you drive or what material things you have if you don’t have a safe, warm house to put them.”
George said she began attending open homes before getting pre-approval from her bank to see what was available.
“It was scary.”
That was because the houses she looked at were not only out of her budget, but also needed a lot of DIY work.
“At that stage, there wasn’t anything that I fell in love with.”
Then in November, the Ministry of Housing and Urban Development opened eight Ngāti Whakaue affordable houses for Ngāti Whakaue whānau on the Wharenui Rise development.
The single-level, three-bedroom, one-bathroom, homes were priced at $500,000.
The Wharenui Rise development is a commercial housing development on land owned by Ngāti Whakaue Tribal Lands in Ōwhata.
“I thought, this is what I have been waiting for,” George said. “You had to whakapapa back to the land, which was important to me ...
“So I went back to the bank to find out what I could do to get that ‘yes’.”
After gaining pre-approval, George was allocated one of the eight homes.
George said the home was one street over from where her dad grew up, about 100 metres from the school she went to and 1 kilometre from where her parents lived.
“There couldn’t have been a better opportunity.”
After moving into her new home, George said she had found her “why”.
“This is why I worked all of those extra hours. This is what I wanted and it was all worth it.”
George said she had enjoyed having a sense of connection with the seven other homeowners in the development.
“Having their support made it feel like a community before you even moved in.”
Two other women had also bought their first homes in the development, she said.
“I’m buzzing for them as much as I am myself … it’s cool to know my neighbours are like-minded people who have worked super hard to get into their homes too.”
Her advice to others was to “keep going and explore all options”.
“Know what your why is.”
According to CoreLogic’s report, released this month, it was taking first-home buyers almost eight and a half years to save for their house deposit.
And once they had secured a home, they were spending an average of nearly half of their household income on their mortgage repayments.
Rotorua’s average property value was $684,276, which was about six times the gross annual average household income of $108,627.
That meant the percentage of income required to service a mortgage was a “record” 43 per cent.
CoreLogic’s chief property economist Kelvin Davidson said affordability had started to improve in Rotorua “but it’s still relatively small and from a stretched starting position”.
And the improvement was not across all measures, he said.
Davidson said as house prices fell and incomes rose, Rotorua’s value-to-income ratio had dropped from 7.0 in quarter 1, 2022, to 6.3, which signalled improved affordability - but it was still above the average of 4.5.
“Then if you look at Rotorua’s typical new mortgage payment as percentage of income, it’s actually still at a record high, of 43 per cent [compared to the average of 28 per cent]. So it’s a mixture of good news and bad news really.
“From here, affordability should continue to get better, but it’s a long process.”
Classic Builders was one of the build partners in Ngāti Whakaue’s Wharenui Rise development.
The Classic Group’s managing director Matt Lagerberg said there had been an increase in inquiries from first-home buyers.
“We have had seven first-home buyers purchase with us in the last few months in the Bay of Plenty.”
New homes in the Bay were priced from $599,000, which was considered a comparably affordable option suited to first-home buyers, he said.
But accessing funding was by far their biggest challenge, preventing them from moving forward, he said.
“Understanding how lending works and what the banks are requiring - and why, is something we are working hard to educate first-home buyers on.”
It was working with each first-home buyer to try to find a way forward for them, he said.
“When it comes to getting a mortgage right now, the traditional approach does not work for everyone.
“In some cases we are considering flexible contract terms, helping friends work through the process of purchasing a home together, and we’re seeing siblings buy together. These kinds of solutions reflect their strong appetite to invest in property.”
The good news was banks were showing signs of softening, he said.
"If you’re loyal to them, they will be loyal to you."