If the price is right

These homes for sale all fall under the First Home Loan scheme price cap — but watch out for some fairly major catches in Auckland and Wellington, writes Mikaela Wilkes.

After a year of price rises, can first-home buyers still find properties under the First Home Loan scheme price caps? Yes, but there might be a catch, if these listings are anything to go by.

We looked at the five mostviewed listings that came in under cap on Trade Me – but two out of five options would be ruled out for most first-home buyers for other obvious reasons.

Changes to the First Home Loan scheme price caps were part of the Government’s last big play to tackle the housing crisis. That included increases to house price caps, allowing buyers to receive the grants and loans for slightly more expensive houses.

On April 1, the price caps for new homes rose to $700,000 in Auckland; $650,000 in Wellington; $600,000 in Nelson, Tauranga, Western Bay of Plenty, Hamilton, Waipa¯, Hastings and Napier; and $550,000 in Dunedin and Waikato.

The price caps remained unchanged at $650,000 in Queenstown, $550,000 in Christchurch, and $500,000 in most of the rest of New Zealand.

Many commentators believe the price caps are still set too low.

Auckland

The most-viewed property under the first-home buyer’s cap for Auckland is a one-bedroom, onebathroom house in ta¯huhu.

It sits on a tidy quarter of land on a cross-lease section under a ‘‘residue’’ title. The quarter belonging to you would be a fraction of the 1394-square-metre section. But the blast-from-thepast asking price of $499,000 had us immediately wondering: What’s the catch?

Listing agent Jimmy Singh of Hills Real Estate said buyers should complete ‘‘due diligence’’.

The median sale price for ta¯huhu was $825,000 in August last year, according to the Real Estate Institute of New Zealand (REINZ), and $860,000, in August this year – a 4.2 per cent year-onyear increase.

That would make this house half-price at face value.

However, the building lacks an issued code compliance certificate, meaning that at present it is legally akin to a garage. The title can be corrected, Singh said, but the buyer would need the time and money to engage engineers, surveyors and lawyers, as well as get permission from neighbours.

Singh estimates that would cost somewhere between $150,000 and $200,000, but he can’t be sure.

The property is estimated to be worth $705,000, according to Homes.co.nz, and it was last sold in May, for a price that is yet to be confirmed.

‘‘This sort of section could fetch $1 million now, but not many people are interested because of the time component,’’ Singh said.

Hamilton

Casting our search to Hamilton, this two-bedroom, one-bathroom home in Bader is described as the ‘‘ideal investment or first home’’.

The ‘‘lovely, modernised’’ unit is one of a pair, and this half has the road front. The two units share a 1090sqm section and have off-street parking and a large (roughly 20sqm) storage shed.

The home has a large, sunny deck with room for a vegetable garden, and there’s a new kitchen.

The asking price for this 72sqm abode comes in at a cool $499,000, giving buyers $100,000 of wiggle room beneath the KiwiSaver cap in the city.

‘‘This low-maintenance unit makes for an ideal investment property,’’ the listing says.

‘‘It could make a great first home, in a quiet Hamilton street that is handy to the Waikato Hospital and central city.’’

The median sale price in the Melville, Waikato, area was $699,00 in August, up from $500,000 last year by 39.8 per cent.

Wellington

As the adage goes, if something appears too good to be true, it usually is. Case in point: this gorgeous one-bedroom, onebathroom apartment on the corner of Vivian and Cuba streets, in the heart of the capital city’s hustle and bustle.

The New York-style home set above Flying Burrito Brothers (important to point out, for proximity to frozen margaritas and melted cheese) has been on the market for about two years.

That could explain why the listing has been viewed so many times. ‘‘Within comfortable walking distance to Wellington’s CBD heartland or the university campuses of either Victoria or Massey University, this property should be on your ‘must-see list’,’’ the listing says.

The median price for an apartment in Te Aro, Wellington, in August last year was $830,000, and $890,000 in August this year. That was a 7.2 per cent¯Oyear-onyear increase.

But the asking price for this spacious apartment is just $300,000. Why? The building, like several in the CBD, is on the earthquake-prone building register. It needs seismic strengthening, despite having had some work done in 1999, listing agent Ken Dentice of Harcourts said.

Renters and owners may still choose to live there as long as the risk is disclosed. There is a plan to strengthen the entire building, at a cost to each owner. The fee was initially estimated to be about $300,000 per apartment, Dentice said, but the estimate is now somewhere around the $500,000 mark.

This is a deal-breaker for most first-home buyers, because banks won’t loan out hundreds of thousands for strengthening work, like they will a mortgage.

‘‘This is the dilemma that many, many Wellingtonian apartment-owners are facing,’’ said Dentice. ‘‘It’s standard fare for buildings of the 1900s to 1940s to need strengthening.’’

Christchurch

The Garden City may well be the last bastion of affordable city living. The most-viewed property that falls beneath the $550,000 cap in Christchurch is a central onebedroom, one-bathroom apartment in Worcester St.

‘‘Located above Cathedral Junction, in the heart of our redeveloping city, your inner-city life starts here,’’ says the listing.

The asking price for this ‘‘vibrant and viable townhouse alternative’’ is $385,000.

The median sale price for an apartment in Christchurch City in August was $475,000, up from $425,000 last year by 11.8 per cent.

This apartment is on the third floor and the light-filled space includes a balcony, as well as a secure basement car park.

Southland

Is it time to move to Gore? This 1920s weatherboard gem comes at the low, low asking price of $129,000. The two-bedroom, onebathroom home has a 90sqm floor plan and a spacious 1012sqm section.

It was last sold in 2007 for $75,000 and Homes.co.nz now think it’s worth about $150,000.

There is a separate kitchen that leads into an open-plan living and dining area heated by an old-fashioned potbelly burner.

The bathroom has a toilet and bathtub with an overhead shower. The laundry is separate.

The median sale price for a house in Gore was $375,000 in August, up from $340,000 last year – a 10.3 per cent increase.

For a mere $15,000 deposit, just think of the renovations you could turn the rest of your budget to!