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Getting into your first home: by the numbers

18 May 2018

Sometimes buying your first home can seem daunting, but when you consider the numbers and look at the benefits of investing in a property for the first time, it’s actually a step that can be affordable. We had a chat to Kiwibank’s home loan specialist Donna Neville about lending and repayments based on an individual earning $70,000 per annum to see how things stacked up. 

The average market rent per week in West Harbour, Auckland (the closest suburb to Hobsonville Point the Ministry of Business, Innovation and Employment keeps records for) for the six months to April 2018 was $595, with the upper average $700/week, and the lower $520/week. It’s a hefty cost per week, and if the recent trends are anything to go by, median market rents are going to continue increasing. 

So, we looked at the cost of buying a home instead of renting to see what the comparison looked like. Kerepeti’s Axis Series homes are designed specifically for first home buyers, or those in a similar situation to a first home buyer. To be eligible for an Axis Series home, an individual must have a gross annual income of $85,000 or less, and a couple must earn a gross annual income of $130,000 or less. 

Kerepeti last week released the third and final stage of Axis Series affordable homes, with 16 homes available ranging in price from $450,000 through to $600,000. The stage three offering includes a mix of one-bedroom walk-ups and apartments, many with lovely outdoor terraces, and a three-bedroom, two-bathroom terrace home.

According to Kiwibank’s home loan specialist Donna Neville, purchasing at this level, particularly for a one-bedroom apartment as a first home, is often something people think the bank won’t lend money for. “At Kiwibank, we’re always looking for ways to help first home buyers and unlike some banks, we don’t insist on a 70m2 minimum. Some of Kerepeti’s Axis Series apartments are 43m2 with green credentials and are in a great neighbourhood. They could be yours if you have a 10 per cent deposit ($45,000), and you can use your Kiwisaver, as well as Home Start Grants, to get you there.”

Based on a purchase price of $450,000 with a 10 per cent deposit of $45,000, a mortgage of $405,000, weekly repayments would be approximately $602 per week based on an interest rate of six per cent. If a couple earned a combined income of $130,000 per annum, that would mean a leftover income of $1,109  per week after the mortgage had been paid. “What makes choosing to pay a mortgage instead of rent a great move, is that you are paying off an investment that grows in value over time,” Kerepeti’s Axis Series manager Catherine Lister says. “And with rents rising, the cost of mortgage repayments is no more than the cost of paying rent so it doesn’t have to be something that comes at a hefty price. For many people purchasing Axis Series homes, we find this is exactly why they have made the decision to buy their first home: they are taking their first step on the property ladder and paying off their own home, which is growing in value, instead of paying rent to a landlord and missing out on the capital gains that come with owning their own home.”

For more information about Kerepeti’s affordable homes, and to see what’s available now, read more about Axis Series homes here.

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