The humble first home still exists in Auckland. Around a quarter of Aucklanders seeking mortgages are first home buyers and won't all be able to afford a renovated villa in Grey Lynn.

Home design consultant Brenda Kelly encourages first home buyers to really think about what they need.

"As (comedic actor) Will Rogers once said: 'Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like,'" says Kelly.

"It may be tempting to include a media room, second lounge and triple-car garage (in your shopping list), but that's going to be costly and let's be realistic, how often will you use them?" says Kelly.


"Do your cars really need an enclosed home of their own, or will off-street parking or a carport suffice?"

Kiwis are slowly waking up to the idea that apartments or terraced houses can be first homes.

Andrew Murray, real estate agent at Apartment Specialists, says for first home buyers an apartment can be a stepping stone to a suburban home.

While the deposit for a Grey Lynn home may be out of their reach, they could most likely fine it easier to buy a suitable $500,000 apartment in today's market.

Murray cites clients who bought a $350,000 apartment as their first home in 2013, have just sold at $650,000 and are now moving on up to a detached home in the suburbs.

Murray says while apartments didn't go up in value much from 2000 to 2010, thanks to oversupply, the market is now experiencing capital growth.

Humble new builds can make good first homes because the loan to value ratios (LVRs) are usually lower at 10 per cent than a second hand home, where most buyers must find 20 per cent deposit. The KiwiSaver HomeStart is doubled to $20,000 for a couple buying a qualifying brand new first home.

LJ Hooker Pukekohe owner Dylan Turner says new apartments on the southern end of Auckland start at around $350,000. Pacific Gardens Manukau is proving popular with first home buyers, he says.


The development, is well located near the new Vector Wero Whitewater Park, the Westfield Mall, the train station and motorway.

Terraced and duplex homes in many of the new developments on the outskirts of Auckland can be bought for less than $650,000.

For example G.J Gardner has two-bedroom townhouses for sale at Waimana Rise, Waitakere, from $599,000. Barfoot & Thompson's Manurewa branch is selling two- bedroom KiwiBuild Homes at Battalion Drive, Papakura, for $525,000.

First home buyers who want a standalone brand new home can get their foot in the door for around $650,000 in the towns Tuakau, Pokeno and Pukekohe, says Turner. The Belmont Estate development in Pukekohe was a good example.

Second-hand homes in Turner's catchment will cost less than a brand new home, but will in most cases need a higher LVR. Some first home buyers are lucky enough to find a bank that will lend to them on a 10 per cent LVR, says Turner. But not all. Real bargain basement first home buyers can look at leasehold properties.

Another option is to start small and expand as your family grows and the need and finances arise. That may include extending an existing home or trading up to the next level.

One of the issues in finding a humble first home is reining in expectations. While having three, four or even five bedrooms is nice, something smaller is likely to be more affordable. The bigger the home the more expensive and an extra $50,000 on the mortgage now costs more than twice that in the long run, she says.

"Larger homes also require more to heat and cool, more furnishings, more maintenance so ongoing costs are higher, all things that should factor into your decision making," says Kelly.

Even with a smaller home smart design and fit out can go a long way in making a smaller home just as practical and functional as a larger one, says Kelly.

She says humble first home buyers who are willing to buy a smaller home than they dream of living in should consider innovative furniture such as desk beds: a desk by day that can easily convert to a queen sized bed at night.