WELCOME TO THE PROSPECT OF HOME OWNERSHIP
I can still remember the elation of purchasing, the discipline of pooling every source of income to provide
the deposit, and then moving forward to make that very simple house a home. It was the early ’80s and interest rates were stratospheric at 21 per cent, (yes, I know, hard to believe!) but it was also a time where everyone you knew was in the same position. Collectively, you were able to take that first tenuous step up onto the property ladder – but the world is a very different one now. Back then, the acquisition of a house was simply a question of ‘when’, today it’s become a matter of ‘if’, based on the variables that exist in the marketplace and within our current culture.
So, it’s worth outlining what some of those variables are.
Firstly, renting versus buying. Times have changed: the usual cost of a first home now sits between $375,000 and $550,000, with two-bedroom apartments or units and three- bedroom houses in solid suburbs dominating. The weight of having a deposit – 20 per cent (or less, in some cases) – and then the ability to service the loan has caused a section of the population to simply say ‘pass’ to the prospect of buying and a hearty ‘yes’ to renting, preferring a lifestyle without the burden of maintenance and mortgage payments taking precedence.
Statistics show that the actual rate of home ownership in New Zealand sits just under 65 per cent, potentially dropping to less than 63 per cent in the next 12 months. So, those choosing to rent are a growing demographic; no doubt encouraging landlords to keep their property investment levels up.
Secondly, KiwiSaver. The opportunity this range of products provides to first-home buyers cannot be underestimated and we are seeing buyers utilise them every week, including to purchase property at auction.
If you don’t yet have KiwiSaver, I suggest you talk to a financial adviser or to your bank. The ability for a couple who both have KiwiSaver to combine their funds can make an incredible difference to a first-home purchase.
Lastly, where should you buy? Every city has a suburb hierarchy, but I’ve found that aside from the very traditional ‘blue-chip’ (high-value) ones, Christchurch is becoming more diverse and interesting. The earthquakes, rebuild, and the inner-city regeneration are changing everything – people are shopping as much with their heart and with a view to the future as with their funds.
And I say, well done! Whether you buy or you don’t, enjoy the journey!