That Kiwi dream of the quarter acre section is long gone if you haven’t noticed. Our city is changing quickly, and it needs to! With property prices barely stopping to take a breath, most of the market is already out of reach of first home buyers. However, a silent hero has emerged among all this, the apartment.
Auckland has a bit of a history with apartments and that’s why there is a stigma around building up. But why exactly? The past is exactly the that, the past. These modern apartments and walk-up developments aren’t in the same league as the ones of old. Building codes and materials have come a long way since then.
Modern apartments are warm, well insulated, bright, smartly planned and more.
First Home Buyers Must Change their Mindset
Despite what first home buyers may think, their first home is not their forever home. You would be hard pressed to find a ‘house and land package’ under $650k at even the furthest reaches of Auckland. A quick look at prices in Pukekohe and Warkworth will give you that insight.
With the housing ownership gulf most prominent in the nation’s biggest cities, let’s take a look at another large city. Nearly half of London’s residents live in apartments! As unbelievable as that is to us, that is how most of the developed world’s largest cities are. Apartments have long provided the perfect solution to optimize space in city centers and allow more people to access home ownership.
Interestingly, people are not that averse to considering apartments, it’s the banks that are holding them back.
Banks Holding Back Buyers
They have long been reluctant to lend on smaller apartments especially. Most of them even ask for a 50% deposit and thus locking out first home buyers straightaway. ANZ however has made some headway recently by relaxing their lending criteria. They lowered their deposit requirements to 20% for apartments larger than 38 square meters (not leasehold/studio).
Thanks to the banks’ stringent lending requirements, someone looking to buy an affordable apartments at $400,000 ends up putting down more than a house worth more than double.
Further prompting change from the banks is the apartments values themselves. Prices have held up well recently with Auckland seeing an 17% rise. While houses were up 28%, the gap is definitely getting smaller. With the public thinking that apartments values would collapse once the borders were closed, that simply wasn’t the case.
A unit titles amendment bill is also passing through parliament which could provide further hope for first home buyers.
Thanks for reading! Hope it helped you see apartments in a new light.