Any prospective first home buyer reading headlines about the property market in the past decade could be forgiven for resigning themselves to be renting well into retirement.
But contrary to the prevailing narrative, market share is increasing for first home buyers, currently sitting at approximately 24 percent of all purchases in the property market.
Even in Auckland, where many assume everyone without generous millionaire parents has been priced out of the market, first home owners make up 26 percent of buyers.
So it's not just possible to get on the property ladder currently, it's happening across the country. But as values increase along with interest rates, the earlier you start seriously planning your first property purchase the better, as it won't get any easier as time goes on.
That's why Property Apprentice, who've been helping Kiwis into homes for more than two decades, have teamed up with Newshub to bring you some of their top tips toward taking your first, crucial step towards owning your first property.
"In the years I've been working with first home buyers at Property Apprentice I have never yet had someone turn around and say 'I wish I'd wasted another ten years before trying," says Property Apprentice Founder Debbie Roberts.
Let's start with the obvious.
1. Don't assume you need a 20 percent deposit.
The most daunting financial hurdle in home ownership is gathering the initial deposit, with 20 percent often seen as the magic number. But don't assume that's the minimum you'll need because you can potentially get by with a lot less upfront. Start by checking whether you qualify for a Kiwisaver withdrawal, as well as a first home grant from the Government. And while banks are subject to tightening restrictions on lending, according to Debbie it doesn't mean they're barred from lending more in some circumstances.
"They're still allowed to lend 10 percent of their total loans to people that need to borrow more than 80 percent. So you might only need a 10 per cent deposit toward the loan. You could only need a five percent deposit, potentially."
However, how likely a bank is to lend you more money depends on many factors and some are less obvious than others. For help ensuring you're in the best position to get approved, you might want to call in the experts.
2. A mortgage adviser can be your best friend
Aside from the obvious financial stress of applying for a mortgage, there's a forest of jargon and numbers to navigate before you even submit your application. It pays to have someone trustworthy who can do all the dense, difficult work of finding the right lender and guide you through each step of the process.
"A good mortgage adviser is there for the individual right for the entire duration of the mortgage. So it's not just a one-off shot," says Debbie, who describes her own adviser as 'worth her weight in gold'.
And while their services can be priceless, there's generally no charge to you for using a mortgage adviser since they get paid by the lender when your loan is approved.
They're also legally obliged to disclose any fees or conflict of interest to you up front, so if a fee is involved, you will know about it before you make any commitments. Once you've teamed up, one of the most important things your adviser can do is help you be 'bank ready'.
3. Being an attractive lender to the bank makes all the difference
Before you invite a bank to comb through your personal financial information, it pays to make sure it's at presentation quality. To start with, remember banks like to see at least three months of good account conduct, such as no unarranged overdraft charges, and a proven savings history.
Reducing your overall consumer debt, from Laybys, Afterpay and credit cards will also have a major effect on the amount the bank will lend to you. Even if you never use your credit card or pay it off every month, just having the card in your name could affect the bank's judgement.
Having everything in order before you apply is important because a failed application can follow you around.
"If you're going to the banks directly yourself and you get turned down, every loan application you have to do after that, you have to state that you've been turned down for lending," Debbie says.
Of course, the simplest thing you can do to help your loan get approved is asking for less money. And to that end, there's one thing to keep in mind.
4. Your first home (probably) isn't your forever home
"It's amazing how many first time buyers think that the only way that they're going to be able to buy a home is to spend a million bucks," says Debbie.
"There's plenty of different options, even in Auckland, at price points way lower than that."
Whether it's buying a rental property, looking a bit further afield or just scooping up something requiring a bit of TLC, consider your first home as a stepping stone not the end of the road. The first step onto the ladder is the hardest and getting there will require some compromises. But while you have to be clear-eyed about the challenges, Debbie says the key is to never give up and keep your eye on the end goal.
"You have to believe that you're going to be able to do something otherwise you won't even try. And if you don't try, you'll definitely fail."
Wherever you are on your home ownership journey, ready to make offers or only just starting to save for your deposit, head over to Property Apprentice for more assistance.
This article was created for Property Apprentice.
