Whether you're looking to purchase your first home or your first investment property, if you're a new property buyer, it can be daunting to navigate today's market. Our Barfoot & Thompson Director Kiri Barfoot shares some tips.
Save, save, and save some more
There’s no getting around the fact that, in order to purchase your first property, you'll need money in the bank.
Saving up a home deposit can be the biggest obstacle for first property buyers. Studies, travel, and money spent on an active social life are obvious roadblocks to saving, but with rising house prices not corresponding to wage increases, what’s a young person to do?
“It’s important to remember that it has always been difficult to get your foot on the property ladder,” says Kiri Barfoot. “Instead of giving up, keep focused on your goals and consider your options.”
Maximising your KiwiSaver contributions with a view to withdraw funds for your first home can be a way to build up savings more quickly and automatically. You may also be eligible for the KiwiSaver HomeStart grant.
You may be eligible for the First Home Loan, which means you'll only need a 5 - 10% deposit. Check their website for more details and eligibility criteria.
It may seem obvious, but cutting back on non-essential spending is necessary to reach your goals faster. Saving even small amounts can add up over time, and most importantly, will help build the savings habit and mindset.
"Property investment is an expensive pursuit and some sacrifices will need to be made. This doesn't have to mean no more fun, but you'll have to consider your priorities and savings goals before purchasing something non-essential - only you can decide whether something is worth it to you."
Think outside the box
If you've managed to save a deposit, the next step is to find a property you can afford.
As a young property buyer, it helps to look beyond the ‘traditional’ standalone house on a quarter-acre and expand your search to include apartments, units, terraced houses, multi-family properties and new builds.
“Remember that your first property isn’t necessarily your forever home, but a good way to build equity that you can use for your next property,” says Kiri.
Look for opportunities
Keep an open mind and be prepared to look at neighbourhoods that aren’t so trendy, or properties that are rough around the edges. “If you look around, there are still opportunities to be had for entry-level properties,” says Kiri. Areas that are close to public transport hubs or new motorways (both new and proposed) are great places to look.
“It pays to not be a snob. In the 1960s, people turned down Herne Bay properties as they had to drive through Ponsonby to get there. Now, look at both suburbs! You never know which suburb will be the next up-and-comer.”
Keep your finger on the pulse and your eyes on the prize
Keep up to date with the local market by subscribing to The Dream Team e-newsletter (email your details to email@example.com) . Let us know what you are looking for and we’ll be happy to let you know of any properties coming onto the market that meet your criteria, as well as offer support and professional advice.
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Last but not least, stay positive! "Don't give up, you'll get there eventually," says Kiri. "You can have it all - you just can't have it all at once." The financial stability and freedom you create for yourself will far outweigh any sacrifices you make now.