Quarter-acre dream over for FHB

Jonno Ingerson
Quarter-acre dream over for FHB

People often spend some time over the Christmas break thinking about what their next move in the property market is. For first home buyers things have been a bit tricky lately.

Quite apart from the LVR speed limits meaning that a larger deposit is often needed, there has also been a real lack of choice in most of the main centres, and in Auckland the rapidly rising prices have made affordability a real issue.

SEE ALSO: Is a holiday home a good investment?

If you’re in Auckland and can only afford something up to $400k then the choices really are limited. According to our E-Valuer, which estimates the current market value of every property, there are no houses that cheap on the North Shore and the 1,200 or so properties that cheap are townhouses and apartments.

Jonno ProfileLikewise, close to Auckland central there are very few houses, for example in Ellerslie there are only 23 houses, let alone those currently for sale. Out west, in Henderson and Ranui there are 411 and 538 houses respectively worth under $400k, while in the south, Manurewa has over 2,500 and Otara 3,400.

If your budget stretches to $550k then there are more options on the North Shore and the fringes of Auckland City.

However it does look as if the quarter acre dream for young Auckland families may just about be a thing of the past. For those of us not too familiar with that older terminology, a quarter acre is 1012 square metres, plenty of room for some back yard cricket and a trampoline for the kids. Of properties worth $600k only 4% of them have that much land, and they are almost exclusively in West and South Auckland.

Since the LVR speed limits came into effect in October 2013 we have seen first home buyer activity shift to cheaper areas. One good example of this is Trentham, a suburb in Upper Hutt north of Wellington where more first home buyers have been purchasing. The average value there is $303k and while there are only a handful of quarter acre properties, 25% of the properties are over 800 square metres. A commuter train from there will see you in central Wellington in 40 minutes.

An increasing trend in New Zealand, as well as Australia and the United States, is for first home buyers to buy their first property in more affordable outlying suburbs, rent it out, then live in rental accommodation close to the city. Now there’s food for thought.

SEE ALSO: Is a holiday home a good investment?

Jonno Ingerson is Director of Research at CoreLogic, and regularly provides the latest data and analytical insight on the property market throughout the country.

CoreLogic is a leading property information, analytics and services provider in New Zealand, and provides clients with innovative, technology-based services as well as access to rich data and analytics.

 

House Hunting?

Navigate the house hunting process with handy tools and info from Westpac:

 

Tags:
, , , , , , ,