The question on everybody’s lips is… “is Auckland too expensive to invest in?”
On a daily basis, we are seeing commentary in the media about how hard it is to buy property in Auckland. That house prices are out of reach of most people and that there doesn’t seem to be any sign of it changing.
So, are they right?
Is Auckland out of reach when it comes to the price of houses?
Let’s look into whether that is true, what history has told us, and whether or not you could hope to buy property in Auckland.
Is Auckland Housing Too Expensive?
Well, the answer to that question lies in perspective. If you are looking to buy a mini mansion in Ponsonby, then the answer is probably yes. That kind of house is out of reach for the average New Zealander. However, the outer suburbs of Auckland Central are more affordable and in reach of many more people.
The problem lies in the fact that most people need to live in Auckland for the specialised job roles they hold. Blue collar jobs have become more technical due to technological advancements, and the hub of innovation lies in Auckland Central. So the solution of moving out of the area is not a good one.
People want to both live and work in Auckland. Due to congestion on the roads, they also want to live as close to the city as possible. This is pushing up demand in the central suburbs where less of a commute is required. Of course, that pushes up the price also, putting the inner city larger properties out of reach of many.
What History Has Told Us
Back in the time of our parents and grandparents, buying a family home was the sole focus. It was simply the done thing. So, previous generations worked long hours and directed all of their money into buying a home.
But, times have changed. The Kiwi dream is no longer a 3 bedroom home on a quarter acre section in the suburbs. It is now a 4 bedroom home in the inner city. Many people pay lip service to the fact that they want to buy a home. They claim they are saving hard for a deposit. Yet, even after years of supposedly saving, they get no closer to buying a home.
So, what is stopping them?
Technology and advancement have put many commodities within reach of all income earners. The age of disposable income is upon us. We have become a society of spenders. Clothes, shoes, trips, eating out, makeup, and gadgets all seem to take precedence over saving for that house deposit.
If even half of those spending funds were saved, then Auckland housing would be far more accessible for people.
How Can You Do It?
The secret to buying property in Auckland is knowing the right areas to look in and the kind of home to look for. It is also about setting the right expectations for yourself.
For your first home or first investment property, you will want to rule out those mini mansions in Ponsonby. Instead, aim a little bit lower. It is not to say that you won’t one day own a home like that. But it is unrealistic to make it your goal if you are not yet on the property ladder or do not have decent equity in your current home.
Instead, look for the suburbs that are on the fringe of the city. These are the ones that you can buy for a reasonable price and then add value through renovations. This then makes them ideal to live in for yourself, but also attractive to tenants if you choose to rent it out.
The best way to do it is to get solid advice from knowledgeable professionals. So, if you are wanting to invest in central Auckland property, get in touch with us here at Ronovationz today. We can ensure that the property you do buy will create a sound investment for your future.