The excellent Personal Finance section of the Weekend Herald hosted by Mary Holm featured a letter this week from a 25 year living in Auckland earning $62,000 a year and asking the question – how could he and his wife possibly afford to buy in Auckland where as he states in the letter the average house price is around $500,000. He states that his weekly net income is $806 after tax, student loan and kiwi saver. He judged that something was out of skew and that possibly house prices might have to go through a correction.
This letter naturally got me thinking. Firstly if this question was universal to all 25 year olds or to all first time buyers then the market would very quickly come to a grinding halt and have to re-adjust prices for without first time buyers the market would have no fuel at the bottom end to stoke the engine.
Secondly there always seems to be an assumption or over simplification that if the median price is $470,000 (the actual Auckland figure for all sales in April from REINZ) then somehow this is the cost of houses in Auckland – it is only the mathematical median price. Of the 1,768 houses sold in Auckland in April 884 were sold at a price above $470,000 and 884 were sold at a price below $470,000.
In the spirit of helpful assistance I though I would assist this 25 year old find a suitable property they could afford on their single income (they are thinking of starting a family soon so rightly want to budget for one income).
Here then are some options.
How about the central city suburbs – Grey Lynn is a nice area. This 3 bedroom house is on at $399,000. According to the Westpac mortgage calculator on the site this with a 5% deposit of $79,800 would cost $424.91 a week based in the current interest rates for a 30 year mortgage.
Maybe the central city does not suit so how about the North Shore. This 2 bedroom apartment in Albany is only $246,000 – with a $49,200 deposit this would cost $261.97 a week based on a 30 year mortgage at the current mortgage rate of 5.65%
How about out west Auckland – here is a modern townhouse, 2 bedrooms at $259,000 in Glen Eden. With that 20% deposit of $51,800 this property would have weekly repayments of $275.82 on a 30 year mortgage.
This is the start of any property buying (or renting experience) – it is typified by a “lean back” mode in the chair to view the screen – here the task is to chose a location and then browse through images in a large format in which property images can be scanned. This is achieved in the search result page for any location. Any property listing can be assessed by flicking through the portfolio of images without ever leaving the search results thereby ensuring you have your options in front of you.
This stage in the process is far more investigative and is typified by a “lean forward” mode in the chair closer to the computer terminal. At this stage it is all about capturing your favourites and this requires you to set up your “My Property” feature on the site. Doing this ensures that your properties and saved searches are always accessible from any computer. Storing your favorites from the search results then allows you to view each property in detail on the listing page.
The website of Realestate.co.nz is one of the most popular means by which people in NZ and overseas search for properties for sale or rent. With over 30,000 sessions per day and around 400 new listings per day – it is not surprising that people undertake searches for a wide variety of properties or property types.
