It’s so easy to sit there in judgement of banks and first home buyers and Kiwibuild and investment property and gauging the impact of debt levels on society… and getting all wound up in that stuff. 

And it’s a fact that the comment section following every financial or property related article on the likes of pages ,such as One Roof and, are loaded with exactly that kind of judgemental angst. 

First home buyers especially come in for plenty of stick and it’s the same old same old.

“They shouldn’t be buying brand new houses” was one opinion that raised my eyebrows the other day.

The thinking goes that buying brand new is: 

  • More expensive than buying an existing house, and so the size of mortgage is that much bigger and that’s the last thing first home buyers should be doing.
  • That if you buy brand new then that’s what you’ll expect from life (ie. everything to be brand new).
  • And although not a specific comment, there’s definitely an underlying attitude from the opinionati that the current crop of first home buyers should suffer and sacrifice a little bit more than they already do in order to get into a house. A little less smashed avocado, if you will.

Frankly, I can’t think of a group of home buyers who haven’t suffered more in recent times than first time buyers. 

Not only have house prices rocketed in front of their eyes (since 2010 generally but especially the two year period from 2014 to 2016), they’ve also had LVR restrictions thrown in front of them which basically amount to ‘your deposit – while hard won – isn’t good enough’. 

I’ve personally helped a heap of people overcome those hurdles, but there are at least as many who never made it. Buying off the plan (ie. brand new houses) has been part of the solution for that group, simply because rules allow you to buy new with only a 10% deposit (half what you need for an existing property). 

Look, if the rules of the day make it more attractive for people to buy a brand-new place than a cheap and shitty existing property to do up (and yes, for some people, that’s exactly what the rules amount to), then what else would you expect people to do? Start eating smashed avocado again while fretting over their KiwiSaver returns?

Just because the do up was how you climbed the ladder doesn’t mean that it’s the right path for others. What’s wrong with the idea of buying brand new, buying another brand-new property a few years later, repeating this a few times, holding the lot for 15 years and then selling down to clear all your debt? Could be a good option if sanding and painting ain’t your thing.

If you care to read a little NZ housing market history, you’ll see that there have always been incentives of some sort for people to get into property. 

There have always been hurdles too, the oft trotted out “in my day interest rates were 18%” is a classic example.

Here’s the thing: 

If you’re looking to get on the property ladder or maybe you’re looking for ideas on how to help your kids to get on the property ladder, then let me give you two tips:

  • Do what you can to block out the noise.
  • Get some advice as to what your borrowing options actually look like and what that means in terms of what you can actually do (or not do).

And go from there with knowledge to guide you rather than opinion and rhetoric. Pick up the phone and call us, we can help you with that.

About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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