Property Report: Cast your net wider

Units or apartments are usually more affordable than houses. Auckland Mayor Len Brown says about a third of new resource consents for Auckland dwellings are for apartments. So more apartments will be coming to market.

John Bolton of Auckland mortgage brokers Squirrel reckons first-home buyers can sometimes find good value for money in units.

"I've seen some good units sell for achievable prices in areas such as New Lynn and Avondale, even Kingsland and Mt Albert. It's all about hunting them out. Units tend to be well-built. You can move into a tired one an old person lived in before they went to a retirement home, spend $15,000 or $20,000 over time updating it and create a brilliant home."

Mae Hensman's first foray into property ownership was a one-bedroom unit and she used the capital gain on it to buy her first house. Coming from a property-savvy family, 24-year-old psychologist Mae was driven to get into property ownership early.

"I fitted part-time jobs around my studies from the time I was 15, sometimes having four on the go at one time. I lived thriftily and had saved enough for the deposit on a one-bedroom Mt Eden unit by the time I was 20."

Mae never lived in the unit, tenanting it to pay the mortgage, which her father went guarantor for. A year ago the capital gain on the unit enabled her to pay $445,000 for her first house, a three-bedroom 1970s home in Avondale.

Team up

Sky-rocketing prices can make solo first home buying a hard slog and the quest difficult even for couples. It's becoming increasingly common for first home buyers to use help from their parents to get into their starter property.

However, Ma and Pa aren't the only option. John says other types of first home buyer joint purchases are a small but growing trend.

"We see a couple of different situations. One is where someone wants a passive investment. For example, a buyer might have a Kiwi mate who's working abroad who's willing to say 'I'll give you some money so you've got a decent deposit, you take care of the mortgage and we'll share in the capital gain. The other situation is when you have family members buying together."

John is also seeing young people subdividing off part of their parents' larger section to build their first home.

Mortgage broker Bruce Patten of The Loan Market has also noticed more first home buyer clients buying jointly.

"For example, I've got two brothers buying together and have just had two sisters and their partners buy a house together."

Twenty-nine-year-old Andy Lov joined forces with his parents to buy a five-bedroom Mt Roskill property able to bring in good income from flatmates.

"I'd been looking to buy for a couple of years but it was hard to gauge prices with everything going to auction and prices going up generally.

"My parents wanted to invest in property for their retirement so we decided to go in together."

Andy, who works in sales and marketing in the automotive industry, topped up his savings with funds from his parents to achieve the deposit. They had a lawyer draw up a property sharing agreement. He now lives in the house with flatmates servicing the mortgage.

"It's a real relief to have my foot in the door.

"I feel fortunate that my parents are at a stage in their life where they were able to do this. But I feel bad for all those other first home buyers struggling out there."

Be flexible

John and Bruce have observed first home buyers getting more bang for their buck by being flexible about location.

John's noted them looking further afield in areas such as Helensville or Puhoi and considering more affordable, formerly untrendy areas such as Papakura.

Bruce has watched them spread their net further as prices increase. He's had a first home buyer client who's planning to commute to Auckland decide to build a new home in Mercer.

"He didn't want to buy closer in and have a $600,000 mortgage, probably for something much smaller, when he can build a new three-bedroom house there and have a $350,000 mortgage."

John reckons it's worth first home buyers also being flexible by considering somewhat "ugly duckling" houses.

"There's no use chasing that cute little cottage that has 120 other people going through the open home. What about that slightly ugly one that could do with being painted a different colour? It can end up being a good deal."