The great housing debate and Kiwi-Indian first homebuyers
First homebuyers in the Kiwi-Indian community have to go through the normal grind that everyone else in New Zealand has to go through before stepping on to the property ladder except that political parties are not separately cajoling them in this election year.
Currently, first homebuyers are at the centre of political attention and rightly though for what some experts describe as being pushed out of the Auckland housing market at the cost of investors and speculators.
The Labour party has made the housing crisis as their main agenda in these elections stating repeatedly that National has even failed to acknowledge the crisis.
Against this backdrop, the National Party has recently announced its housing policy that promises to build more than 34,000 new houses in Auckland over the next 10 years.
This would comprise 13,500 newly built state houses and 20,600 houses for the open market for private sales.
Social Housing Minister Amy Adams announced that Housing New Zealand would be building 24,300 houses through its Auckland Housing Programme thus bringing some purpose built new properties in the Auckland market.
Among the houses for private sales, there will be houses in both the affordable and open market segments. The government defines "affordable" in Auckland as costing less than $650,000.
The Minister was however not clear what numbers of the houses would be in the affordable segment and reserved for the first homebuyers.
Opposition parties have described this policy as an admission of a housing crisis and an acknowledgement of the fact that government can also build the houses – something that they allege that this government has consistently abstained from.
“National cannot now credibly claim to be tackling the housing crisis four months out from the election when, for nine years, they have ignored the plight of first homebuyers and families in need," says Leader of the Opposition and the Labour Party, Andrew Little.
While experts are debating about the possible impact on government's decision on the housing market, Indian Weekender took the opportunity to explore how this announcement could possibly affect the prospective homebuyers in the community.
Agnostic toward National-Labour housing debate
It is apparent that most of the prospective first homebuyers in the Kiwi-Indian community appeared to be agnostic if not unconcerned about the great housing debate of Auckland between major political parties.
However, there are two important points worth noting about the first homebuyers segment within the Kiwi-Indian community.
First, the percentage of prospective first homebuyers within the Kiwi-Indian community is significantly larger than the percentage of first homebuyers in the housing market.
According to a CoreLogic property report released in March earlier this year, there was a slight fall of first homebuyers in the housing market to just under 20 per cent.
As opposed to this, the percentage of prospective first homebuyers with the Kiwi-Indian community is significantly higher than 20 per cent.
This is purely because of the fact that most of them are relatively new migrants to New Zealand arriving in the just the past three-four years when Auckland's housing market has significantly shot up, leaving many of them still out of the property ladder.
Second, despite the seeming lack of interest in the big political debate around housing within this big segment of prospective first homebuyers, a majority of them want to jump on to the property ladder as and when possible.
Therefore, any news that can potentially alter the market dynamics, especially access to affordable houses and availability and supply issues of properties in general, catches their immediate attention.
Question of accessibility of these new affordable houses
Many prospective first home buyers are keen to know how they can access the new affordable houses in the market.
"I have been looking for the right property (three bedrooms) that suits my needs and pocket since the last eight months without any luck," said a visibly frustrated Mohammed Hussain who lives in the Mt Roskill area and is currently looking for a property in the Botany-Howick area.
"I am happy to consider these new affordable houses that the government is promising as long as I can find them in the market.
"Can we approach Housing New Zealand and ask about the location and expected time of delivery for these new affordable houses?" a visibly frustrated Mr Hussain asked.
Meanwhile, Indian Weekender spoke with several readers who have recently succeeded in buying their first homes to confirm that finding the right property is among the biggest of travails that all first homebuyers have faced or continue to face in Auckland's overheated market.
According to Barfoot & Thompson's latest suburb report on house prices, the Auckland average is $847,289, a fair notch above what the government now describes as affordable.
This is even when some early reports are emerging that Auckland's overheated market may be cooling off.
However, these signs of the market cooling off do not automatically translate into the easy accessibility of houses to the first home buyers as vendors continue to hold their properties in anticipation of a market rebound and better price.
Nathan Saminathan of Mortgage Masters says that vendors holding their properties is one big reason contributing toward the supply deficit of appropriate homes for the first homebuyers.
Against this backdrop, there is some expected befuddlement among the prospective first homebuyers toward the government announcement of bringing some new affordable houses in the market.
"I would like to know how to get access to these new affordable houses in the market," said a calculative Johnson Dunna, resident of Mt Albert.
"Although I have been saving money toward my first home, I am just not in the market as of now, as I want to wait for a little bit longer to see how the market behaves, especially with some reports of market easing off and now government's announcement of new affordable homes," Mr Dunna said.
Advice to first homebuyers
- Save hard as you can
The first step of getting on to the property ladder even before you start doing your due diligence about the property is to start saving and watching your pennies. The old saying that if you watch your cents the dollar will take care of itself is nowhere as relevant as in Auckland's current housing market.
Your ability to save hard and gather the minimum deposit will eventually decide the bank's faith in your ability to service the loan and consequently determine funds available to you to eventually shop around for the right property.
- Get the right mortgage adviser
"Despite much noise around the housing market and the question of supply and demand, availability, and affordability of houses, a significant number of first homebuyers do climb the property ladder every year and a right mortgage adviser plays an important role in this endeavour," says Ajay Kumar of Global Financial Solutions.
Similarly, Nathan Saminathan of Mortgage Finance says, "A good mortgage adviser endeavours to take all the stress out of the first home buying experience."
- Don't be scared of compromising
It is important to remember that getting on to the property ladder is far more important than getting the right property, so do not be scared of compromising.
A proper needs and wants analysis prior to buying your first home will help in clearing a lot of clutter around making a sound buying decision.
- There is no good time as today to get into the property market
Regardless of what many experts tend to suggest, you would benefit the most by following your dad's advice, which says that there is never a better time to get on to the property ladder than today.
First homebuyers in the Kiwi-Indian community have to go through the normal grind that everyone else in New Zealand has to go through before stepping on to the property ladder except that political parties are not separately cajoling them in this election year.
Currently, first homebuyers are at...
First homebuyers in the Kiwi-Indian community have to go through the normal grind that everyone else in New Zealand has to go through before stepping on to the property ladder except that political parties are not separately cajoling them in this election year.
Currently, first homebuyers are at the centre of political attention and rightly though for what some experts describe as being pushed out of the Auckland housing market at the cost of investors and speculators.
The Labour party has made the housing crisis as their main agenda in these elections stating repeatedly that National has even failed to acknowledge the crisis.
Against this backdrop, the National Party has recently announced its housing policy that promises to build more than 34,000 new houses in Auckland over the next 10 years.
This would comprise 13,500 newly built state houses and 20,600 houses for the open market for private sales.
Social Housing Minister Amy Adams announced that Housing New Zealand would be building 24,300 houses through its Auckland Housing Programme thus bringing some purpose built new properties in the Auckland market.
Among the houses for private sales, there will be houses in both the affordable and open market segments. The government defines "affordable" in Auckland as costing less than $650,000.
The Minister was however not clear what numbers of the houses would be in the affordable segment and reserved for the first homebuyers.
Opposition parties have described this policy as an admission of a housing crisis and an acknowledgement of the fact that government can also build the houses – something that they allege that this government has consistently abstained from.
“National cannot now credibly claim to be tackling the housing crisis four months out from the election when, for nine years, they have ignored the plight of first homebuyers and families in need," says Leader of the Opposition and the Labour Party, Andrew Little.
While experts are debating about the possible impact on government's decision on the housing market, Indian Weekender took the opportunity to explore how this announcement could possibly affect the prospective homebuyers in the community.
Agnostic toward National-Labour housing debate
It is apparent that most of the prospective first homebuyers in the Kiwi-Indian community appeared to be agnostic if not unconcerned about the great housing debate of Auckland between major political parties.
However, there are two important points worth noting about the first homebuyers segment within the Kiwi-Indian community.
First, the percentage of prospective first homebuyers within the Kiwi-Indian community is significantly larger than the percentage of first homebuyers in the housing market.
According to a CoreLogic property report released in March earlier this year, there was a slight fall of first homebuyers in the housing market to just under 20 per cent.
As opposed to this, the percentage of prospective first homebuyers with the Kiwi-Indian community is significantly higher than 20 per cent.
This is purely because of the fact that most of them are relatively new migrants to New Zealand arriving in the just the past three-four years when Auckland's housing market has significantly shot up, leaving many of them still out of the property ladder.
Second, despite the seeming lack of interest in the big political debate around housing within this big segment of prospective first homebuyers, a majority of them want to jump on to the property ladder as and when possible.
Therefore, any news that can potentially alter the market dynamics, especially access to affordable houses and availability and supply issues of properties in general, catches their immediate attention.
Question of accessibility of these new affordable houses
Many prospective first home buyers are keen to know how they can access the new affordable houses in the market.
"I have been looking for the right property (three bedrooms) that suits my needs and pocket since the last eight months without any luck," said a visibly frustrated Mohammed Hussain who lives in the Mt Roskill area and is currently looking for a property in the Botany-Howick area.
"I am happy to consider these new affordable houses that the government is promising as long as I can find them in the market.
"Can we approach Housing New Zealand and ask about the location and expected time of delivery for these new affordable houses?" a visibly frustrated Mr Hussain asked.
Meanwhile, Indian Weekender spoke with several readers who have recently succeeded in buying their first homes to confirm that finding the right property is among the biggest of travails that all first homebuyers have faced or continue to face in Auckland's overheated market.
According to Barfoot & Thompson's latest suburb report on house prices, the Auckland average is $847,289, a fair notch above what the government now describes as affordable.
This is even when some early reports are emerging that Auckland's overheated market may be cooling off.
However, these signs of the market cooling off do not automatically translate into the easy accessibility of houses to the first home buyers as vendors continue to hold their properties in anticipation of a market rebound and better price.
Nathan Saminathan of Mortgage Masters says that vendors holding their properties is one big reason contributing toward the supply deficit of appropriate homes for the first homebuyers.
Against this backdrop, there is some expected befuddlement among the prospective first homebuyers toward the government announcement of bringing some new affordable houses in the market.
"I would like to know how to get access to these new affordable houses in the market," said a calculative Johnson Dunna, resident of Mt Albert.
"Although I have been saving money toward my first home, I am just not in the market as of now, as I want to wait for a little bit longer to see how the market behaves, especially with some reports of market easing off and now government's announcement of new affordable homes," Mr Dunna said.
Advice to first homebuyers
- Save hard as you can
The first step of getting on to the property ladder even before you start doing your due diligence about the property is to start saving and watching your pennies. The old saying that if you watch your cents the dollar will take care of itself is nowhere as relevant as in Auckland's current housing market.
Your ability to save hard and gather the minimum deposit will eventually decide the bank's faith in your ability to service the loan and consequently determine funds available to you to eventually shop around for the right property.
- Get the right mortgage adviser
"Despite much noise around the housing market and the question of supply and demand, availability, and affordability of houses, a significant number of first homebuyers do climb the property ladder every year and a right mortgage adviser plays an important role in this endeavour," says Ajay Kumar of Global Financial Solutions.
Similarly, Nathan Saminathan of Mortgage Finance says, "A good mortgage adviser endeavours to take all the stress out of the first home buying experience."
- Don't be scared of compromising
It is important to remember that getting on to the property ladder is far more important than getting the right property, so do not be scared of compromising.
A proper needs and wants analysis prior to buying your first home will help in clearing a lot of clutter around making a sound buying decision.
- There is no good time as today to get into the property market
Regardless of what many experts tend to suggest, you would benefit the most by following your dad's advice, which says that there is never a better time to get on to the property ladder than today.
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