It's not often you hear a real estate agent telling first-time home buyers to hold fire on forking out for a house if paying the mortgage will put them under huge financial pressure.
But, despite selling houses for a living, Nathan Najib of Najib Real Estate in Christchurch, hates the thought of people overstretching themselves and getting into financial trouble because they feel they should be on the property ladder.
He knows times are tough, thanks to the high cost of living, wages that haven't kept up with inflation and the increase in interest rates. All buyers are also contending with the new CCCFA regulations introduced last year, requiring lenders to do more thorough checks into borrowers' income and spending habits – making it harder to get loans.
But that's not a bad thing, says Najib: "If you can't afford to pay the mortgage, it's best not to get one."
However, that doesn't mean ditching your dream of owning the roof above your head. While it's definitely tougher for first-time buyers than those already in the property market (who've made good capital gains on their homes thanks to soaring prices over the last couple of years), the good news is that, as New Zealand's major cities go, Christchurch is the most affordable.
"When you look at other cities, Christchurch is the cheapest one to live in still," says Najib, pointing out that 70 per cent of its suburbs have an average property value of less than $1m.
As regions go, the average property value in Canterbury is $789,000, according to One Roof, while the national average is $1,053,000. The average value in Auckland is $1,468,000, $1,027,000 in Greater Wellington and $958,000 in Otago.
House prices are still going down – Nathan predicts another possible drop of around 15-20 per cent – so they will become more affordable in the months to come. The fact that lots of homes are being built is also encouraging, as more housing stock means lower prices.
If first-time buyers can pull their belts in and save more money for a deposit – which will cut the size of their repayments – they should hopefully be better able to afford to own their own home a little further down the track.
And developing good financial habits can help you to live within your means once you have a mortgage, he says.
"This society makes it easy to swipe your credit card and spend money – and these habits can get people in trouble, especially when interest rates are high, inflation is high and wages are not keeping up. So people need to learn to be more frugal with their money as we ride this wave."
So when does a property become affordable?
"Anything under 40 per cent of your income spent on mortgage payments is considered as being in the affordable range," says Najib. "That can still be tough for young families where only one partner works full-time and the other one works part-time – but once they can get on the property ladder, it will be worth it in the long run."
First-time buyers care less about how much money they can make in capital gain from their home, and more about having a place to call their own. However, they should bear in mind that property is a great investment. Najib believes you can't go wrong owning a home in Christchurch.
"People will always want to live in Christchurch – you can have such a great lifestyle here," says Najib, who emigrated to New Zealand from Afghanistan as a child. "You've got the beach 20 minutes away and the mountains 20 minutes away, it's easy to get around, you've got everything you need right here. It's a really nice place to live."
That's become apparent to Kiwis living in other parts of New Zealand and, in the last couple of years, there has been a flood of people moving to the city, attracted by its amenities and affordability.
That's started to slow down, says Najib, which will work in the favour of first-time and local buyers as there will be less competition for the properties they want to buy.
The luxury market is still active, he says, though not quite as active as 6-12 months ago, "because buyers moving here are having more trouble selling their homes up north".
"If they aren't getting as much money as before, that will affect our top end of the market too. But the reality is, if you can sell an expensive house in Auckland now, you might get less for it than last year – but you can come to Christchurch and afford to buy a better house in a better city and still have cash in the bank."
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