21 Mar 2016

'Fair' price for first home in Auckland? $700,000

7:21 pm on 21 March 2016

First-home buyers continue to face rising prices in Auckland and Wellington, with a price tag of $700,000 for a first house in Auckland described as reasonable.

A sold sticker on a real estate sign outside a house in Auckland.

Photo: RNZ / Kim Baker Wilson

Barfoot & Thompson surveyed 500 Aucklanders aged between 18 and 34 about their thoughts on buying their first home.

It found 18 percent of them were delaying having children so they could save money, and almost a third did not expect to get on the property ladder for a decade or more.

Most of them, 91 percent, said they wanted to own their home for stability and financial security. But just 38 percent of people thought it could be done in Auckland.

Barfoot & Thompson managing director Peter Thompson said younger people were still looking to buy a house now before it got harder.

"I think the $700,000 bracket that we're talking about is a fair reflection, it gets a good quality three-bedroom in a reasonably good suburb that for first home buyers is feasible."

But Mr Thompson cautioned people about spending on a house that they could not afford.

"With the average salary not going up at the same rate as the cost of living, it is making it a lot harder. It just means that if people are wanting to buy... you do need to be putting as much money away as you can.

"If you get an extra bonus in your pay cheque for a good year's work or something, by all means go out and have a celebratory drink, but put as much of it away in your account that you can to build toward your first home," Mr Thompson said.

Wellington mortgage broker Sonya Reid also said young people felt under intense pressure to buy before things got worse.

"I had clients who last week spent $780,000 for a house in Petone and that is not that uncommon. The average mortgage size for first-home buyers is definitely going up," Ms Reid said.

She said first-home buyers who had missed out on properties were becoming desperate to get on the property ladder.