A reader e-mails:
Just read your blog on housing affordability. Good stuff. The other point that is worth making is that the left go on about average housing prices and how they are out of reach of 1st Home Buyers. It is such a chardonnay socialist concept. For gods sake – who as a first home buyer buys an average priced property? Only a few well heeled young professionals. Most, nearly all, first homebuyers buy at the bottom end of the market (including myself). It’s called doing the hard yards by starting at the bottom of the property ladder. And to get on the ladder they may have to buy in suburbs which are not their first preference.
While that may come as a shock to some, just check out the numerous options on www.realestate.co.nz of properties under $400k in Auckland. On the first page alone I saw a 2 bedroom flat in One Tree Hill (nice suburb) for $338k. A $20k contribution to a couple from Kiwisaver ($10k of their own savings) would get them into this pretty easily depending on their combined incomes. Nice starter with the opportunity to add some value. Have a look at the options on the various real estate web sites.
Sure – not ideal for a large family but people should be aiming to get into the property market before they endow themselves with multiple kids, get themselves established and then have children. Even with this flat you could have your first child before moving up to a bigger home, but by that time you might have been in the property market for 4 to 5 years (2 to 3 as young couple and another two with a baby) and have built some tidy capital.
It is a good point that we should not overly focus on the average price. For first time buyers the level of say the 25th percentile is probably a more useful figure.
I’ve only owned two apartments. The first one cost me around a third of the second one, as I worked my way up the property chain. I would never ever have been able to consider going straight into what I own today.