First-home buyer hot spots
Miriam Bell looks at where first-home buyers are most active right now.
First-home buyers are still active in the market, but affordability issues mean suburbs with lower house prices are proving most attractive.
The rapid price increases of recent years, rising mortgage rates, the return of loan-to-value ratio restrictions, and tough new lending rules have made buying a first home more difficult.
But the dream remains. Across January and February, first-home buyers had a 23 per cent share of purchases nationwide, according to CoreLogic’s buyer classification figures. This is above the longterm average of 21.8 per cent.
CoreLogic looked at suburbs where first-home buyers made at least 30 purchases in the past six months, and where they had a market share of at least 30 per cent. It then ranked the suburbs that qualified by the prevalence of first-home buyers there.
Flaxmere, in Hawke’s Bay, had the highest share of firsthome buyers at 57 per cent. Next were Stokes Valley in the Wellington region and Gate Pa¯ in Tauranga with a 54 per cent market share, and Aranui in Christchurch and Marewa in Napier with 52 per cent.
Nawton in Hamilton with 50 per cent, Glen Eden and Avondale in Auckland with 44 per cent, and Woolston in Christchurch and O¯ ta¯ huhu in Auckland with 43 per cent rounded out the top 10.
Of the top 50 suburbs nationwide, nearly half (24) were in the Auckland region, seven were in the Wellington region and 10 were in Christchurch.
CoreLogic chief property economist Kelvin Davidson said the greater size and population of Auckland inevitably meant more of the region’s suburbs featured, but it did reflect the market.
First-home buyers’ market share tended to be higher in cities, he said. In JanuaryFebruary, Auckland’s was 25 per cent, Wellington’s was 31 per cent and Christchurch’s was 28 per cent.
‘‘But the clear trend is a correlation between higher firsthome buyer percentage share and lower prices.’’
Many of the suburbs were traditional entry point favourites, such as Hornby, Redwood and Sydenham in Christchurch, but some newer suburbs, such as Hobsonville in Auckland, featured too.
‘‘In some suburbs, such as Aranui and Birkdale [Auckland], first-home buyers are paying more than the typical price for the suburb. It may be that they are buying more ‘upper end’, or larger, properties in those suburbs than is typical.
‘‘In contrast, Hobsonville, Te Atatu¯ Peninsula, and Takanini in Auckland all have prices paid below the typical value for these suburbs, and this could indicate a preference for smaller dwellings, such as townhouses or apartments.’’
Flaxmere
With the highest first-home buyer share in the country, Flaxmere is the biggest hot spot. It is an outlying suburb of
Hastings and was built in response to high demand in the 1960s and 1970s.
Property Brokers Hawke’s Bay regional manager Joe Snee said it was intended to be affordable housing and had traditionally been a lowerincome neighbourhood. Cheap prices meant it has been popular with investors and there were many rentals.
But over the past two years investors had been selling up to capitalise their gains, and many properties were being bought by first-home buyers. ‘‘That is changing the face of the neighbourhood.’’
The big attraction is the prices, which remain affordable despite going up with the market. CoreLogic has the suburb’s median price at $527,700, and Snee said there were still properties available under the region’s First Home Grant cap of $527,000.
‘‘You can get a solid house on a decent-sized section for a good price. But it is also easy to get to Hastings, so there are no commuting issues.
‘‘There are schools, kindergartens, supermarkets and park areas, and it backs onto orchards in the area.’’
Stokes Valley
Stokes Valley, in Lower Hutt, had the second-highest firsthome buyer share nationally and the highest share in the wider Wellington region.
It had always been popular as an entry point to the market, and that was because buyers could get more for their money, CK & Co Realty managing director Hannah Kilgariff said.
CoreLogic put the suburb’s median price at $811,250.
But Kilgariff said it was possible to get a four-bedroom, two-bathroom house for that price, and there was a good range of properties on reasonable sized sections.
‘‘The stock is dominated by well-maintained or renovated homes, which largely date from the 1950s to 1970s. We listed a tidy, two-bedroom house with a garage in Stokes Valley for $650,000 this week, and it is attracting the most inquiry of all our listings.’’
The suburb did not have direct access to the motorway, which lengthened commute times, and this was likely to be why its prices did not tend to rise like others in the area, she said.
‘‘But it has good schools, a supermarket, shops and a pub, a recreation reserve, and a nice community.’’
Aranui
Aranui had the fourth-highest proportion of first-home buyers nationally, and the highest proportion of Christchurch’s suburbs. Like Flaxmere, it has traditionally been a lowerincome neighbourhood.
Ray White Christchurch Metro director Tony McPherson said the suburb’s affordable prices make it attractive to people wanting to get into the market.
The suburb’s median price is $441,800, according to CoreLogic. But there were properties under or around $400,000 available, McPherson said.
‘‘That means you can still buy a house under the city’s First Home Grant cap of $500,000.
‘‘It sits between the CBD and New Brighton, and it is an easy commute to the city. It also borders the Avon red-zoned area, which is now green space, and has a good mix of shops and facilities.’’ For first-home buyers, it could be an accessible starting point, McPherson said.
Glen Eden
The Auckland suburb with the highest first-home buyer share is Glen Eden in West Auckland. As well as being more affordable than many other parts of Auckland, it also sits on the train line, which gives it added pull.
Ray White Austar Realty general manager Len Day said Glen Eden could offer existing properties and new builds for under $1 million.
CoreLogic has the suburb’s median price at $953,500, but the Real Estate Institute put Auckland’s median price at $1.19m in February. Threebedroom houses dominated the existing stock, and it was possible to get a house of that size on a smaller section for under $1m, Day said.
‘‘It is a struggle to find a fourbedroom house going for under $1m, and older two-bedroom houses are not common. But there is an increasing number of new build townhouses coming onto the market, so there is a range of options.’’
Glen Eden’s location has other attractions for home buyers. Its proximity to the train line makes commuting to the city easy, and it sits between West Auckland’s two biggest hubs, New Lynn and Henderson, which have been extensively redeveloped in recent years.
Day said this means it was good for transport, there were work opportunities close by, and there was a wide range of new infrastructure, services, and recreational options at hand.