Plenty of options for first home buyers across the country

There’s plenty of advice for first-time homebuyers looking for a step on the property ladder.

While one option is to buy a property and rent it out; that doesn’t help those wanting to settle down and lay down roots.

Thankfully, homes.co.nz – drawing on years of real-world property sales data – has been able to identify suburbs with lots to offer people wanting their first home.

Many property watchers will know the median price of homes in their area, but the median is not the whole story.

Data scientist Tom Lintern has been working at homes.co.nz for four years and part of his job is to track property sales data from across the country.

He says that on average 25% of properties in lots of popular locations fall well below the headline median.

“There’s always going to be a lot more opportunity to get on the housing market in the regions than the city,” he says. “But if you are limited to a city due to work commitments then there are still options.

“Auckland, for example, has some good-priced apartments; or head south of the city if you want a small garden. Christchurch also has some very good prices and I’d say it is under-valued for what you get.”

Looking to buy in a city may involve some level of compromise, but it will be a first step on the property ladder and your first home doesn’t have to be your forever home – it’s a stepping stone.

For example, the median value in greater Auckland is $911,000; but focus on the central city and the median drops to $446,000 – due to its huge apartment market. The first-home buyer estimate for a central-city dwelling is $323,000.

A hop, skip, and a jump away from the CBD is Grafton where entry-level homes can be bought for around $225,000 (median $498,000).  However, banks are fussy about studio apartments smaller than 40sqm.

Damian Piggin has been selling apartments since 2003 and works for Ray White City Apartments in Auckland.

“Plenty of young people are buying apartments in the $450,000 to $470,000 price range in Auckland’s central city area,” he says. “It’s certainly an area where first home buyers have picked up a lot of slack in the market.

“Buyers are also comfortable with the idea of lease-hold and body corporate fees by the time they are ready to buy – they do their research and understand the differences in the apartment market.”

If an apartment isn’t for you then consider the South Auckland suburb of Papakura where a home can be picked up for around $540,000 (median $629,000).

Leaving Auckland behind…How about heading south to Paraparaumu on the Kapiti Coast? The median value there is $616,000 but homes.co.nz’s first home buyer estimate is $517,000.

Wellington is not out of bounds either with suburbs around the Capital offering some very well-priced real estate. For example, while Wellington’s median is $794,000 the first home buyer estimate is $640,000.

In Lower Hutt, a quarter of all properties are valued at around $465,000. How about Johnsonville? It’s a large suburb seven kilometres north of Wellington city centre where the median is $688,000 but where entry-level homes needing some TLC sit closer to $600,000.

“It’s quite common that properties here need a little bit of attention, but it is a popular area for first home buyers,” says William Yip, a real estate agent with First National.

“They are not do-up projects, but some are a bit dated so you can add value. A lot of the older owners are moving on and so there has been an influx of young people over the last few years. Open homes here are very busy.”

“I expect prices here to go up once all the dated properties are out of the market.”

Head 95k north of Wellington to Levin and prices drop like a stone. In the largest town in the Manawatū-Whanganui district, you can buy a home for around $325,000.

As homes.co.nz’s Tom Lintern says, Christchurch also offers plenty of good-value homes where the median is $445,000 and entry-level properties are priced around $357,000. There are some good prices in the Garden City due in part to the massive house-building that went on following the 2011 earthquakes.

Finally; Dunedin is on the up and up with median prices have risen to the heady heights of $460,000. First home buyers there can find property for around $376,000. The popularity of Dunedin is likely down to the overspill of homebuyers pushed out of Alexander and Cromwell where prices have spiked due to housing shortages.

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Steve Hart

About the author

Steve Hart is a specialist freelance writer covering all aspects of real estate.