Being a huge history buff, and the child of immigrant parents, I always secretly thought I would thrive in a global crisis. Without wanting to undermine the extreme tragedy and sadness that has plagued the world over, it is with complete astonishment that at the age of 32, and without help that I settled on purchasing an apartment last week with my friend and flatmate. Let's not get ahead of ourselves, it's 52 square metres.
It all started a week before Christmas, our landlords - corporate lawyers living in London - wanted to sell, leaving us until February 6 to find a new home. Having lived in most cities in New Zealand, I couldn't stomach moving a 20th time. And there's nothing as unsettling as being uprooted at the drop of a hat. Real Estate advertisements reflect the tragedy of the housing crisis - where "Great Investment Opportunity" takes precedence over, say, "This Could Be Your Dream Home". I could go on.
What's more upsetting is that I realised it would cost less to have a mortgage per week than to pay rent. Friends and family were sceptical - how long had we been friends? What if things were to go south? How tight-knit could a property share agreement really be? It was perhaps mad, but my flatmate and I thought taking the plunge was the most practical and cost-effective solution. We could live as we were, enter the housing market, and paint the walls in the process. I could even get a corgi. To my horror, I had become a capitalist overnight.
But first, I had some Googling to do. What on earth did unconditional mean? What exactly was a LIM report and why did I need to possibly pay for it? And why was my legal training of absolutely no help? Needless to say, the process was gruelling. We were lambs to the slaughter. While buying privately meant the vendors could avoid real estate fees, the hassle of repairs or maintenance, and having tenants right up until settlement, we were under no illusion that there was no way we could compete with richie-poos on the open market. The vendors could get possibly $50,000 more but were not capitalists, they said.
So we had the apartment in the bag, but no money. Two mortgage brokers said the dream was entirely unfeasible. I was a contractor for just six months and no bank would want to touch me, and the combination of savings and Kiwisaver meant we had a deposit of 15 per cent. We were short of what felt like a million dollars.
The Ardern Government was no help either, as despite being first-home buyers, we didn't qualify for a first-home grant because there's no possible way you can purchase a house within the regional house price cap. Under the current rules older properties in Auckland and Queenstown can be no more than $600,000, or $500,000 if you're in Wellington or Christchurch.
The caps are a bit rich seeing as median house prices in Auckland and Wellington are almost a million dollars. To further qualify you must make no more than $85,000 a year. It's a Catch-22 insofar as if you may qualify for the first-home buyer scheme but may not make enough to qualify for a mortgage.
AdvertisementAdvertise with NZME.
Just last week Ardern announced plans to "tilt the playing field" towards first-home buyers. "No one wants to live in a country where the only way that you can move into your own home is if your parents can help you," she said. Grant Robertson will be announcing a series of measures, starting with moves to control demand this month. Too little, too late, my friend.
[As an aside, at every point in the process I was asked whether I was a member of "bank of mum and dad". It seemed more surprising - given the current climate - that receiving help from wealthy parents was not an option. It means only the wealthy few can own property, which explains why the rate of homeownership has fallen to 65 per cent. Census data shows it's the lowest rate since 1951.]
It was all looking rather unrealistic until we met mortgage-broker and former Hurricane rugby player Bernie Upton. Dear Bernie. Not only was he delicious in every sense of the word, he was helpful, clear, informative, and had no issue creating miracles when it came to securing a mortgage. Two weeks passed - a lot of emotional drinking ensued - and we were almost in the clear. It was happening. And then it wasn't.
A desktop evaluation (I still don't know what this is) came back almost $100,000 over the asking price, but the valuation-in-person fell $20k short of the asking price. It meant the bank would only loan up to the valued amount, leaving us to beg, borrow, or steal $20,000. After a month of bureaucracy, hopes, and dreams, it was over, and it was brutal. I don't think my heart could take putting an offer on a house in the open market and losing out.
It is here where I would like to take this opportunity to thank all of the staff at the Otago University Law Faculty who provided me with the tools to fight tooth-and-nail and to create a sound business case as to why the valuation was flawed. One million phone calls and a bucket-load of tears later, the valuer came through. And that was that. I gave birth. I mean, I purchased an apartment.
Ultimately, it's a sad reality to have gone through what was a horrible and emotionally draining process, but to be privileged enough to have been able to do so. Shakespeare put it best: "Something is rotten in the state of Denmark."