The key to unlocking million-dollar suburbs
The country’s dress circle areas have a certain street appeal but first-home buyers will have to dig deep if they are to get on the property ladder, finds Melanie Carroll.
New Zealand’s most expensive suburbs are largely out of reach of first-home buyers, but a few streets offer a glimmer of hope to people wanting to get their foot in the door.
In Auckland’s St Marys Bay, which according to homes.co.nz has a median estimated value of $2.37 million and is one of the city’s most expensive suburbs, Westwood Tce has a median estimate of $528,000 thanks to apartments.
In Epsom, with a median of $1.82 million, Edgerley Ave which borders the motorway, has a median estimate of $855,000.
In Wellington, the most affordable street in Seatoun, one of the city’s priciest suburbs, is Khyber Rd with a median estimated value of $937.000.
In Christchurch’s second-priciest suburb, Fendalton, Verran Place is the most affordable with a median price of $634,000.
‘‘I think everybody would aspire to live in Fendalton, unless they want to be a Sumner person,’’ says Debi Pratt, a real estate agent with Tall Poppy in Christchurch.
‘‘I just think it’s outside of a first-home buyer’s reach.’’
Verran Place is in the school zone for Christchurch Girls’ High and Christchurch Boys’ High schools.
‘‘First-home buyers are trying to buy something for around $400,000 most of the time, and that’s hard in Fendalton, even for a unit.
‘‘You’ll find the odd thing but it’s either going to need a lot of work, or it’s going to be on the railway line or there’s going to be something that pulls it back into first-home buyers’ territory,’’ Pratt said.
People were less keen to spend all their spare time renovating a house, something she believed was a generational change and was already happening before the coronavirus pandemic struck.
‘‘The climate has changed from when The Block was trendy and everybody wanted to buy a do-up and it didn’t matter how bad it was,’’ she said.
First-home buyers were instead buying new builds in outer suburbs such as Rolleston, where it was possible to buy a house and land package for under $500,000, Pratt said.
Christchurch was attractive to buyers outside the region and often outside the country. ‘‘There is a huge increase in inquiries from expats for the likes of Fendalton. We’re getting a lot more traffic that shows it’s from the United Kingdom and America, and a lot more inquiries.’’
In her experience, the typical first-home buyer was older than previously, heading towards their 30s rather than in their early 20s.
There was a big leap in activity in the first-home buyers’ market two months ago, she said.
‘‘I feel sorry for them. It’s very hard for them to put their foot on something as there’s competition everywhere they turn for things in that price bracket.
‘‘It’s a fulltime job trying to put your foot in the door of a house at the moment in that lower end.’’
Derek Roser of Eves Realty in Tauranga said that in the city’s pricier, well-established suburbs, the occasional street featured older homes built of cheaper materials, which had not necessarily aged so well.
‘‘You do have odd clusters of homes that are in the suburb of Matua that would be in the lesser price range.
‘‘Whether or not they would be in what the current first-home owner’s general financial state is, is not so easily answered.’’
The first-home buyer price across Tauranga was at least $500,000, whereas less than two years ago it was about $430,000 to $470,000, Roser said.
‘‘Trying to find anything below $450,000, you’re probably buying something that may or may not be in a good area, that may or may not be consented, or have some serious repair and remediation work.’’
About five years ago, property investors bought up and renovated the good-quality homes at reasonable prices in Tauranga’s Greerton and Gate Pa, he said, so houses that once would have been suited for firsthome buyers were now out of their reach.
He said first-home buyers at a recent auction were buying properties in the $700,000s, which indicated people were moving into the city.
Hamilton’s sole million-dollar suburb of Rotokauri, which had a large number of lifestyle properties, did not offer much promise for first-home buyers, said Simon Lugton, managing director of Hamilton real estate agents Lugtons.
However, there were some more affordable options not far away, he said. ‘‘Hamilton is like any other city; within 100 metres you’ve got a $1 million house and then you’ve got a smaller $500,000 house.
‘‘There are streets where there are opportunities for firsthome buyers, but the main difficulty for them is the availability of stock.’’
There was a ‘‘critical shortage’’ of houses for sale. Only about 550 properties were on the market in Hamilton, a record low, Lugton said.
He advised first-home buyers to be decisive, and be prepared to pay more than they wanted to as long as they could service the mortgage.
‘‘They probably think they’re paying over market today, in six months’ time that probably will be irrelevant because their property will have caught up to what they needed to pay to secure it.’’
‘‘The climate has changed from when The Block was trendy and everybody wanted to buy a do-up and it didn’t matter how bad it was.’’
Debi Pratt, left