Two Auckland mums who bought their first property together say getting into the market is tough and are urging first home-buyers to think outside the square.
As working professionals with three pre-teen children between them, Kerry Raynard and Leisha Holliday were each approved to borrow around $700,000. But with Auckland's median property sale price now $1.148 million (according to REINZ May figures), the pair, who wanted to buy in east Auckland, realised this amount was unlikely to buy a home they wanted.
But if they combined deposits and incomes, they could afford to borrow more. One a single-mum who had rented all her adult life, the other making a new start after her marriage ended, the friends found themselves heading down the same path.
"We've been great friends for 15 years and our kids have grown up together… we knew we could make it work," Holliday explained.
Working with a mortgage broker, they were jointly approved to borrow $1 million. But the application process wasn't easy, as banks found it difficult to digest their situation.
"It didn't seem like this was common and therefore banks viewed it as different and therefore risky… hopefully this is the beginning of a change," Holliday said.
Looking at open homes was "challenging" - particularly with children in tow. But fortunately, it took just two weeks of looking to find the home they wanted.
After seeing it passed in at auction, they were able to negotiate the price - paying $1.135 million for a four-bedroom, two-bathroom unit in Highland Park, which settled in early June.
"We were feeling a little despondent as we moved through as we seemed to be $100,000 short of being able to get what we wanted, [so] we were so grateful when we found this home," Holliday said.
As the unit is split over two levels, Leisha and her two girls occupy upstairs. Kerry and her son live downstairs, where the workshop is in the process of being converted to a fifth bedroom.
Their combined deposit, 10 percent of the purchase price ($113,500), was made up of different contribution amounts.
"Our solicitor has drawn up an agreement which details the difference and what would happen should one individual want to move out…[we] know this is a great way for us to get into the market, however it's important to plan for the future should things change," Holliday explained.
She said their situation is proof first home-buyers wanting to get into the current market may need to be creative about how they can make it work.
"Think outside the square… the housing market is tough and feels impossible - sometimes you just need to get creative and we are proof of that.
"The nuclear family is no longer the only way to run a family and a married couple or a couple in a relationship are not the only way to purchase a property," Holliday added.
Campbell Hastie of Hastie Mortgages told Newshub a growing number of friends - and family members - are buying homes together.
For most people, the biggest barrier to buying a first home is saving a deposit. More income generally means people can meet higher loan repayments, therefore borrow more.
"Bring all that together and the possibility of getting into a house comes onto the radar when it might not have if you were trying to do it on your own," Hastie said.
But while there are advantages to buying a home with someone else, there are also risks. The other person may be unable or unwilling to pay their share of the mortgage, or property-related costs.
"An open discussion about who pays for what and what happens if is an absolute must - it should be drawn up in a simple written agreement to avoid future confusion, should any of the 'what ifs' occur," Hastie said.
"This discussion is something people should have really early on to make sure both sides are on the same page - don't wait for auction day to talk it through."