Auckland Central has joined South and West Auckland as a first home buyer hotspot.

First home buyers are increasingly competing with investors for apartments in the city centre, new data shows.

The statistics by analysts OneRoof-Valocity showed South and West Auckland remained the most popular locations for first home buyers, but that central Auckland was now also a hotspot.

Manurewa was the most popular suburb overall as first home buyers made 208 property purchases during the first six months of this year.

Advertisement

Fellow South Auckland suburbs Takanini, Papakura, Papatoetoe and Pukekohe also ranked among the top 10 suburbs as first home buyers looked to city's southern fringes for affordable buys.

Henderson, Massey and Glen Eden in the city's far west were also among the top 10 locations.

Auckland Central in the heart of the city was the ninth most popular suburb.

First home buyers made 114 purchases in the area during the past six months, compared to 183 by investors.

James Wilson - director of valuation at property analysts Valocity - said the figures showed more first home buyers were setting aside the dream of a picket fence and quarter acre yard in favour of apartments.

"This reflects that changing mindset towards a more realistic housing option," he said.

It comes as first home buyers have steadily emerged as the most active property buyers in Auckland, after earlier being locked out of the market by years of skyrocketing house prices.

Last month, they snapped up 28.6 per cent of all new home loans offered by banks, according to the OneRoof-Valocity data.

Advertisement

Investors, by contrast, secured 15.7 per cent of all new home loans, while existing home owners moving into a new house accounted for 9.5 per cent of new home loans.

Those refinancing existing mortgages accounted for 30.2 per cent of new home loans.

Many first home buyers were able to make the jump onto Auckland's property ladder thanks to flat-lining house price growth, record low interest rates and the ability to use KiwiSaver savings as mortgage deposits.

Their willingness to apartment living lifestyles also helped them, Valocity's Wilson said.

He pointed to West Harbour as another example alongside Auckland Central.

West Harbour was the 10th most popular suburb with first home buyers, even though its median property value was $970,000 - or $335,000 higher than Manurewa.

Despite its high overall price, West Harbour had a higher proportion of affordable apartments compared to other suburbs and good ferry transport links to the city, Wilson said.

Statistics showed South and West Auckland remained the most popular locations for first home buyers. Photo / Nick Reed
Statistics showed South and West Auckland remained the most popular locations for first home buyers. Photo / Nick Reed

"So it gives that really practical, commutable first home buyer option," he said.

Among investors, Auckland Central was the most popular location for its apartments popular as rentals with international students.

But - perhaps surprisingly - Remuera was investor's second most popular suburb, despite having a median property value of $1.74 million.

That was because Remuera offered good rental returns, Wilson said.

Investors tended to target Remuera's lower-to-mid-priced homes, which were typically easy to rent out because of the suburb's popularity with families keen to access nearby elite public schools.

The same was true of Mt Eden with a median value of $1.43m, which also ranked among the top five suburbs with investors.

"We are seeing now the market has softened that investors don't necessarily chase the most affordable properties – that is mostly the domain of the first home buyer – they are chasing the best rental yields," Wilson said.

Among existing home owners looking to sell and up size to a new property, the most popular suburbs to buy in were spread across the city, with Pukekohe and Flat Bush ranked the top two.

Wilson said the main trend among so called movers was that they weren't moving as much as they were two to three years ago.

Skyrocketing prices had - in the past - made it easier for them to use the growth in value in their existing homes to secure mortgages to buy bigger properties.

But with that no longer the case, movers were now more cautious about their next buys and using savings gained from record-low interest rates to renovate their properties or purchase a new car or holiday instead, Wilson said.

Mark Bishop: First home at 50

East Auckland resident Mark Bishop recently bought his first home aged 50 - an achievement only made possible by accepting a shift into apartment living.

Bishop had earlier rented large family homes in expensive suburbs so his son and stepchildren could be close to good schools.

But when the Samsung Electronics sales manager recently separated from his former partner, he made the move into a one-bedroom flat in Botany Downs.

"I initially thought, 'I hate this, it's tiny, it's driving me nuts'," he said.

"But then quickly you realise how much space you don't use in a big home."

"I thought, 'Hey, I don't need a big place, I just need a nice little unit'."

Then a two-bedroom unit came up for sale in the same complex where he was renting.

Having never been taught how to manage money well, Bishop didn't have a savings plan through the early part of his life.

Mark Bishop bought his first home in Botany Downs at age 50 after opting for an apartment rather than a home. Photo / Dean Purcell
Mark Bishop bought his first home in Botany Downs at age 50 after opting for an apartment rather than a home. Photo / Dean Purcell

Then, 10 years ago, he began putting $25 into his KiwiSaver each week. This added up to roughly $1000 a year, with the Government tipping in another $500 as part of its Government Contribution scheme.

It also came on top of a generous superannuation plan by his employer that meant Bishop was able to draw about $22,000 from his KiwiSaver and put together a total deposit of $65,000.

With help from his lawyer and Loan Market mortgage broker Megin Wilton, he bought his apartment for $535,000 and is now making home loan repayments of about $700 per week.

He expects the repayments to fall to about $400 per week in five years' time - the same amount he earlier spent on rent.

"But now I'm not paying the landlord's mortage, I'm paying mine," he said.

He said it was an incredible feeling and a sense of security to own his own home after so many years renting.

"This is more than likely my first and only home."