New home owner Leo Anderson at his Onehunga unit. Photo / Jason Oxenham.
A 23-year-old engineer paid $465,000 for an Onehunga brick and tile unit valued at $630,000.
In a city where the median price is still more than $1m, Leo Anderson appears to have scored a sharp deal.
But he said it wasn’t without some extremely hard saving and weeks of negotiating.
“I never thought I’d be an Auckland homeowner at 23, one year out of uni, but here I am,” wrote Anderson on social media this week, telling the Kiwi First Home Buyers’ Group with 58,000 members how he’d succeeded.
The single-level brick and tile unit is listed by Auckland Council as being valued at $630,000 and elsewhere online, its value shows up at $635,000.
“The market is obviously falling and prices of a lot of properties can be negotiated. I had a really limited budget so I could not pay over $500,000. The place had been on the market for about eight months by the time I made the offer,” Anderson said.
He is a student of Ron Hoy Fong’s property coaching business Ronovationz and he hired buyer’s agent Lillian Bai of Barfoot & Thompson to act on his behalf. Anderson praised both.
“Lillian helped with the negotiation process, talked to the listing agent and told them I couldn’t afford more than $465,000. The negotiation process took a few weeks because it went back and forth. The vendor came down a lot, which I appreciated.”
The cross-lease unit in a block of five was listed as “for negotiation” by sales agency Ray White.
Late last year, he was given an indication that $500,000-plus was expected.
But that changed and eventually, Anderson got a deal described by one surprised observer as “extremely sharp”.
Brick and tile units are attractive to buyers, seen as relatively affordable in some Auckland areas, solid and not dogged by leaky building issues.
Some work is needed but nothing major, Anderson said.
Ray White Māngere advertised the one-bedroom/one-garage/one-bathroom unit as “overseas owners want this sold”, said it was near a train station and had a modern kitchen: “A quality option for serious home buyers and smart opportunists alike.”
Anderson said his offer went unconditional in October. The property had been rented, so a three-month settlement occurred on January 10.
A front deck needs rebuilding and some maintenance is required.
He shifted in mid-January. Mortgage payments are just under $2500/month. That gives him enough to live on “because I’m used to living as a student”.
He had a $105,000 deposit and got a $360,000 loan: “I didn’t earn enough to get a loan from a trading bank so I went to a second tier lender Resimac, paying interest a bit above the current standard 7 per cent”.
His deposit was $10,000 from KiwiSaver, a First Home Grant of $5000 and $90,000 in savings.
“I started saving hard at the end of Year 11 in 2015 and had saved $60,000 by the time I finished uni in 2021,” Anderson explained to sceptics who asked how someone so young could buy in Auckland and wondered if he’d got money from parents. He didn’t.
He had worked for four years at the Woodhill Mountain Bike Park on weekends, as a building labourer, as a maths and engineering tutor and as a resident adviser at Auckland University. He also did four paid internships including at Hawkins during his engineering studies.
The former Massey High School student graduated as a structural engineer, which he said initially pays around $60,000 to $75,000 “and I’m no exception to this”. Before buying, he had been living at home, paying what he said was cheap board.
Latest data from Auckland’s biggest real estate chain, Barfoot & Thompson, showed November’s median sales price was $1,065,000. So Anderson’s purchase was 56 per cent below that.
January data from that agency will be released around the beginning of February.
The agency found people trying to sell cheaper places reluctant to drop their prices. Managing director Peter Thompson said pressure on prices was coming from rising interest rates and inflation, concerns over future economic activity and more properties for sale than there have been for a decade remain.
Vendors had become cautious about accepting what they considered to be too low an offer.
“In December the effect of that reluctance was particularly felt in the under $750,000 price category, and the agency sold only 90 homes in this price segment. At the same time we sold 37 homes for more than $2 million, 12 of them for more than $3m,” he said.
And Anderson’s advice for others?
“From attending hundreds of open homes, missing out on 10 other properties, and budgeting for years, it sometimes seemed like a pointless endeavour. But it paid off in the end.”