'Over the moon': First home-buyer scrapes in under Auckland house price cap, gets First Home Grant

Supplied photo - Shirley
Auckland first home-buyer Shirley used KiwiSaver and the First Home Grant towards her deposit on a $625,000 townhouse in Onehunga. Photo credit: Supplied.

An Auckland first home buyer is over the moon about becoming a homeowner, using KiwiSaver and the First Home Grant towards her deposit.

Single first home-buyers earning up to $95,000 per year, who are KiwiSaver members for a minimum of three years, can get $5000 free from the Government to buy a home. The home must also be within the house price cap set for the region - $625,000 for an existing home in Auckland. 

Realestate.co.nz data shows the average asking price in Auckland reached $1.099 million in April, and for first home-buyer Shirley, finding a home within the price cap wasn't easy.   

In April, after around five months of searching, she bought a two-bedroom terrace townhouse in Onehunga for $625,000 - just enough to get the $5000 First Home Grant.  

"After all the auctions I'd gone to, I didn't know it was possible…when the agent called to say the offer had been accepted, I was so over the moon," Shirley said.

Her deposit of $125,000 included $25,000 from her KiwiSaver and $5000 from the First Home Grant.  

"I started saving ever since I started working (over ten years ago) and I had more than 20 percent deposit...I didn't want to use all of it," Shirley explained.

After seeing multiple offers on homes and auction prices going way above her budget, Shirley narrowed her search to homes for sale by negotiation. As there weren't many in this category, the buying process was slow. 

"After I missed out on the auctions, I stopped looking at auction listings completely - I had expectations that whatever was sold would go up and up," Shirley explained.

She attributes being able to buy within the Auckland price cap as simply being in "the right place at the right time", adding that the real estate agent - and the sellers - were helpful.

"[The owner] was moving out of town and they weren't asking too much…it was first $627,000 and we negotiated $625,000 to make the First Home Grant," Shirley added.

"It feels really good to have a property to my name in central Auckland."

Although she bought alone, Shirley's partner will move in and pay rent, which will go towards repaying the mortgage.

Her top tips for other first-home buyers are to do a lot of research, make saving a habit and to get a good team together - a lawyer, mortgage broker and building inspector. 

"I think it's about being smart with saving...every week, $200 went from my pay to an automatic payment so I didn't see the money...that built up quite a bit on top of my KiwiSaver," Shirley added.

Finance Minister Grant Robertson said in April the house price caps were set at "the median of the lower quartile", being the middle price point of all the houses below the median house price. 

Based on the existing home price cap of $625,000 for Auckland, REINZ data over the year to February 2021 showed 2209 homes sold in the Auckland region were within this cap.  

The First Home Grant (and First Home Loan) are available through Kāinga Ora.  Eligibility criteria, including regional house price caps can be found here.