Buying real estate in Auckland
Having a home to call your own is one of the biggest dreams many of us share. While Auckland has its challenges, you could grab a little slice of paradise to call your own. Here are some tips to owning a property in Auckland.
Property prices in Auckland
The bad news for anyone wanting to call Auckland home is that house prices are currently rated as “severely unaffordable” when compared to income. A growing population plus a love for bigger homes with lawn space has meant that the average house price in Auckland is currently around NZ$900,000, after climbing to over a million in the previous year.
The good news, however, is that Auckland is such a sprawling city that if you are willing to compromise on living further out from the center, you can find houses that are more in the NZ$600,000-700,000 range. Plus, there are some good options for loans if you have a strong and steady income and are eligible.
For a medium-sized house close to the city center, you should be prepared to pay over NZ$1,000,000.
How to buy property in Auckland
Houses in New Zealand are generally bought and sold through a real estate agent, who acts as a mediator between the buyer and the seller. The process of buying a house in New Zealand typically involves the following steps:
- Research and Budgeting: Before you start looking for a house, it's important to research the local housing market and determine your budget. This will help you understand what type of property you can afford and what you should be looking for.
- Getting a home loan or mortgage. Nearly all of the mortgages in Auckland are done through a bank. The bank will have a specialist home loan division that will be able to help you check how much money you are eligible to be loaned, work out an interest rate with you, whether fixed or floating, and establish the terms of your loan. A mortgage broker can be useful as they can help in these negotiations and figure out the best option for you. Here are the steps for opening a bank account in New Zealand.
- Legal advice. Find a lawyer who can support you in all of the complicated legal aspects that are involved. It's useful to find one early in the process so you can be sure you are not missing anything that could cause serious delays.
- Finding a Property: You can start your search for a property in Auckland by browsing online listings, visiting open homes, or contacting a real estate agent. A real estate agent can help you find properties that match your needs and budget and can provide you with information on the local housing market. Check out the dozens of REA-registered real estate companies for the human touch. For a self-directed approach, you can check out listings online – Trade Me Property is the most comprehensive website for house listings. You can also drive around the area you might like to live in as you will often see boards outside homes declaring them ‘For Sale', and if it's a Saturday or Sunday, you might come across an open home in progress.
- Due Diligence: Before you commit to the purchase of a property, it's important to conduct due diligence to ensure that the property is in good condition and that there are no hidden issues. Once you have found a house you love, it's important to get a Land Information Memorandum (LIM) report that will have a record of any issues that the house has faced in the past. For extra safety, an engineer structural report can also be useful. Once you have all the information, getting a final valuation or two can ensure you will pay what the property is worth.
- Finally, you are ready to buy. This is when you will either be asked to make an offer to the sellers or go to an auction to place a bid.
- Signing a Sale and Purchase Agreement: Once you and the seller have agreed on the terms of the sale, you will sign a Sale and Purchase Agreement. This is a legally binding contract that sets out the terms and conditions of the sale.
- Settling the Sale: Once the Sale and Purchase Agreement has been signed, the sale will be settled. This typically involves transferring ownership of the property and paying the purchase price to the seller.
Remember, not just anyone can buy a home in Auckland; there are a few requirements. Most importantly, you will need a New Zealand residence permit and to have lived in New Zealand for at least 12 months.
Auction, private sale, or tender?
In New Zealand, there are several common ways to buy a house, including:
- Private Sale: This is the most common method of buying a house in New Zealand. A private sale involves negotiating the purchase of property directly with the seller, either through a real estate agent or privately. This method gives you more control over the process and allows you to negotiate the price and other terms of the sale.
- Auction: Auctions are a common method of buying a house in New Zealand, especially for properties that are in high demand. Auctions are public events where buyers bid against each other to purchase a property. Auctions can be a fast and efficient way to buy a property, but they can also be competitive and stressful.
- Tender: A tender is similar to an auction, but it is usually used for more unique or high-end properties. In a tender, buyers submit written offers to the seller, and the seller chooses the best offer. Tenders can be a good option for buyers who want more control over the sale process, but they can also be more time-consuming than other methods.
- Expressions of Interest: Expressions of interest (EOI) are a less common method of buying a house in New Zealand. In an EOI, buyers submit a written offer to the seller, and the seller then decides which offers to consider. This method can be a good option for buyers who want to get a sense of the market for a particular property, but again it can also be more time-consuming than other methods.
The Auckland property market
Like all real estate markets around the country, the number of houses available in Auckland goes up and down. However, as there are plenty of people looking to buy in Auckland, it's always quite competitive, and it has a reputation for being very expensive. However, in 2023, prices are finally continuing to drop after a year of steady increases.
Do expect to go back and forth on price with the sellers, and be prepared to make offers on multiple homes as the price can climb beyond your budget as other buyers bid against you. Auckland has a high demand for housing, driven by population growth, immigration, and economic development. However, supply has not kept pace with demand, leading to pressure on housing prices and a competitive rental market.
The housing market in Auckland offers a variety of housing options, including standalone houses, townhouses, apartments, and more rural lifestyle block options outside of the city. Each type of housing has its own pros and cons, including location, size, price, and lifestyle considerations. However, the high demand for housing in Auckland has led to rising prices, especially at the lower end of the market. Housing affordability is a major concern for many Auckland residents and is an issue that the government and local communities are working to address.
If you aren't able to buy a home, you will likely be renting. Unfortunately, the rental market in Auckland is also highly competitive, with many people competing for a limited supply of rental properties. As with purchasing a home, rental prices can vary widely depending on the location, size, and quality of the property.
Choosing among Auckland's suburbs
Auckland is divided into many different suburbs, each with its own unique character and atmosphere. Prices do vary across suburbs, but generally, as with most cities, you will be paying a premium to be located somewhere central, although there are some areas further out of town that still garner high prices for their access to natural beauty and larger section sizes (Piha and Titirangi fall into this category). Overall, the cost of housing in “expensive” or “affordable” suburbs in Auckland can vary greatly depending on the size and condition of the property, as well as its location within the neighborhood. It's important to work with a knowledgeable and experienced real estate agent to help you navigate the Auckland housing market and find the right property for your needs and budget. However, it is generally accepted that some of the most expensive suburbs in Auckland include:
- Herne Bay: Herne Bay is a high-end neighborhood located on the waterfront in central Auckland. This area is known for its large, historic homes and its close proximity to the city's best dining and shopping options.
- Parnell: Parnell is a historic neighborhood located near central Auckland. This area is known for its charming, tree-lined streets and its large, historic homes.
- Remuera: Remuera is a well-to-do neighborhood located near central Auckland. This area is known for its historic homes and its proximity to retail and dining districts.
The most affordable areas to buy a house in Auckland tend to be located in the outer suburbs or in areas further from the city center. Some of the most affordable suburbs in Auckland include:
- Manurewa, Papakura, and Otahuhu in South Auckland. These suburbs are known for affordable housing, the large, diverse population, and proximity to the city's southern
- Henderson: Henderson is a suburb located in West Auckland. A popular destination for families, first-time home buyers, and young professionals, Henderson is becoming sought after due to its access to public transportation and affordable housing options.
