15 Apr 2015

Auctions tense for first-time buyers

6:36 am on 15 April 2015

With entry-level prices now sitting at about $500,000, first-home buyers say the Auckland house market is slipping out of reach.

Sold house in Auckland

Photo: RNZ / Diego Opatowski

Median house prices in the city have jumped yet again, to $720,000.

Half of all houses sold in Auckland last month were auctioned - an all-time record.

At Barfoot & Thompson's weekly Manukau auctions yesterday, 26 properties were for sale.

Among the first-home buyers in the room was IT worker Kartik Patel, who was looking for something at about the $500,000 mark so he and his wife could move out of his parents' house.

He had his eye on a three-bedroom house in Papatoetoe - one of just a handful of properties that Barfoot & Thompson expected to sell within his price range.

Within minutes of the auction starting, Mr Patel had the leading bid.

The house was sold to him for $525,000 - ending months of searching.

His wife would be thrilled, he said.

"This is the first house we actually saw that we've walked into and it felt like, this is home. It was perfect ... A bit over our price range, but we had to take it."

Joining forces

Neel Devi, her brother and her parents have lived in rentals in Auckland's central suburbs for more than 20 years and were clubbing together to buy a house.

The also had a budget of about $500,000 and wanted to bid on a three-bedroom house with a sleep-out in Mangere - further out than they ever anticipated having to buy.

This was the family's third auction, after they were dramatically out-bid on their first two attempts, Ms Devi said.

"The first time it happened it was actually quite disheartening ... you kind of want to go home and curl into a ball and cry."

The way Auckland house prices were going, Ms Devi thought she was unlikely to ever own a house in the city by herself.

"I think I'd look at probably leaving Auckland and going somewhere else in the country because it'd be way easier to buy property. But the only thing is the jobs are here."

Barfoot & Thompson auction manager Campbell Dunoon said auctions had proven to be a very effective sales method.

"It does bring out the buyers. There's a call to arms [and] urgency about the process that just generates activity, and I think our vendors appreciate that.

"But I also think the buyers like it too, because they see it as an open and disclosed format of competition for a property."

About $500,000 - $600,000 was the entry-level price for an Auckland property now, Mr Dunoon said.

$450,000 budget gives limited options

Watching keenly from the sidelines yesterday were Rachel Burt and Lee Tibble, who had been looking for their first home for about six months.

Their budget was a maximum of about $450,000 - really limiting where and what the couple could buy, Ms Burt said.

"Ideally we would like a single house but we are opening our minds up to units and that sort of thing given the prices.

"We started off [looking in] Mangere, moved to Mangere East, and tempted to look further afield now as well."

Mr Tibble said he couldn't believe agents were now referring to $500,000 as the price of a first home.

"If half a million dollars is affordable then call me Morris Minor, I don't know ... That's obscene, really."

A sample of Auckland house sales

Seven of the properties sold at the auction:

* Two-bedroom brick unit, Papatoetoe, $457,000

* Three-bedroom house, Pakuranga, $640,000

* Three-bedroom house, Papatoetoe, $525,000

* Three-bedroom house plus self-contained one-bedroom flat, Howick, $1.235 million

* Three-bedroom house, Sunnyhills, $798,000

* Two stand-alone houses on single section, Papatoetoe, $660,000

* Four-bedroom house, Maraetai, $936,000