What it’s like buying a house right now

Sunday, 12 January 2025

Justin Driver and Hannah Foster at their Papanui house that they bought in 2022. They say not being able to go traveling because of Covid helped their chances of buying a house.

Jonathan Killick is a senior reporter with the Sunday Star-Times and has covered property and infrastructure since 2021.

As two working professionals with no children and the backing of parents, my partner and I thought buying a house would be easy. But hell’s bells it was hard.

We wanted a place to call our own; and if the commentators are to be believed, it’s the only way to ensure financial security in this property-obsessed country. And we’re supposedly at the bottom of a cyclical market, which is favourable to buyers.

Beyond the market’s dollars and cents, there were also intangible emotional factors. For too long I’ve been beholden to landlords and their leaky roofs, fearing every bump and scratch on the walls.

Getting into the housing market, though, is easier said than done: according to Kiwibank's ‘State of Home Ownership’ report, 43% of millennials are relying on the bank of mum and dad to buy their first home. That was us; we know how lucky we are.

Part one: budget sub-$1 million

Were we wrong for relishing in the landed elite’s loss of capital gains? For the first time in (my) living memory, millennials can glimpse home ownership, and all it took was a pandemic to crash the global economy.

Walking into open homes over the past 12 months, it was my mission to remind naively optimistic real estate agents that properties were selling at an average of a quarter under capital value. “Ignore CV, it means nothing,” was their chorus.

This doer-upper on Malvern Road in Morningside sold for $1.017 million.

Once we were through the door, it turned out vendors were stubbornly sticking to 2022 ideals. No problem, because I had the best trump card; I could simply walk away with the knowledge they were the desperate ones.

Were our expectations too high? All we were asking for was a free-standing house in Auckland’s central isthmus, a garage to store my convertible, two liveable bedrooms and a third for my better half’s Imelda Marcos-sized shoe collection.

A brick-and-tile duplex in the central isthmus is the go-to aspiration for many an Auckland first-home buyer, usually being a little more affordable.

Then we found it. Our first love. A 1940s brick-and-tile in the Pt Chev fringe. We wrote the vendors a heart-felt letter, including pictures of us, a young couple, designed to tug on boomer heart-strings. It had well-researched reasons why we thought our offer of $885,000 was fair.

The agent engineered a ‘multi-offer scenario’ and said it meant we had to put in our best offer, because the vendors would only deal with one party. As a gambit, I insisted our offer be immediately presented, and included her boss on the email.

It worked. The vendor accepted, but it came with a fateful condition. If another better offer came forward before settlement, we had three working days to satisfy our conditions.

Jonathan Killick and his partner were hunting for mid-century style houses and found their “first love” in the Pt Chev fringe, but it wasn’t to be.

Three hours later, the agent contacted us to say the vendors were invoking the condition. We started furiously calling builders and lawyers, and it looked like just maybe we would pull it off.

But then, in the middle of it all, the agent called to say the contract was cancelled. How? We didn’t initial the new condition on the contract, so it was never dated. A total cop-out in our view, and then the agent suggested we put in a new, higher, offer.

I was spewing. What a muck-around. And, out of sheer indignation, I held firm. “The offer is as it stands.” We lost the house, and looking back, it was probably unwise to lose my temper. Much later I found out it sold for $908,000 - still a steal.

“Don’t worry, the first one never works out, but the spring listings are on their way,” everyone told us.

Over a million for a home beside a shopping mall car park seemed a bit steep to these house-hunters.

Part two: budget $1m+

Now the slog really began, and the misalignment between budget and expectations started to become apparent. That’s where mortgage brokers tell first-home buyers to get realistic, but we instead opted to increase our budget - only possible thanks to our parents. So much for my earlier maligning of intergenerational wealth.

Increasing the budget opened up new options, but I constantly found myself asking: “Are they really asking for more than a million for this?” I took my parents to see a 90s house in St Lukes. The master bedroom looked straight out onto the mall car park. Then, a car did a burnout as we watched from the window… Next…

We decided to get the help of an agent, so we could put the industry’s crafty ways to our own advantage. His connections yielded us private viewings in off-market listings, and it started to feel like we were getting somewhere. But, looking back, our experience suggested “off market” might as well mean “flood risk”.

Jonathan Killick: I’ve always wanted to do up a deco, but it could have been biting off more than a first-home buyer can chew.

One house had river views of Oakley Creek, but had to be extensively repaired after the Auckland Anniversary Weekend floods when those river views came bursting into the lounge. But, the nail in the coffin was standing in a bedroom and hearing rats scratching in the walls.

A friend in his 50s, living vicariously through my house-hunting, found me “the opportunity of a lifetime”. It was a three-bedroom, two-storey, solid concrete 40s art deco gem with a balcony that looked over Morningside’s Fowlds Park. And, it was poised to sell for $1.2m, but there was a reason. The walls were caked in thick black mould and dust, the water was turned off and there was only one working light bulb to be found.

A builder teed up by my friend over a beer suggested it would only need $300,000 to make it liveable, and the value would instantly rise to $1.5m. My partner and I considered it, but where would we live during the reno? Our stomachs churned as we considered betting our life savings on this wreck.

Who hasn’t dreamed of owning a pool room?

It’s probably best we walked away - I understand it sold for $1.017m after someone broke in and stole the taps and hot water cylinder and the vendors hastily cashed in their inheritance.

Part three: budget $1.3m

A double-garage home meant more space for Jonathan Killick’s partner’s shoe collection.

It’s been nine months of searching at this point and we are totally over waking up each weekend morning and coming up with a schedule of open homes for the day.

The market feels like it’s starting to turn and I don’t want to be continuing this into another year. At this point, I’m straight-up telling agents that they can forget about an auction - negotiate now or I move on.

Then, we find ‘the’ house. Double garage with workshop, two bedrooms and a pool room, and the 90-something-year-old vendor has kept its 70s features in mint condition. The agent tells us its going to have to be a good offer to get it off the market, so we throw in $1.25m. Unconditional.

Drinks shared in a crammed garage on moving day.

The vendors come back, pushing us to $1.35m. We tried to walk away, but on the eve of my partner’s 30th birthday, I started doing sums. The benefit of having searched for a house for so long was that our savings had increased. Even with assistance, it was still right at the edge of what we could afford.

By now we’re a little over a month out from Christmas and are warned that banks are busy, and getting our KiwiSavers out could be challenging. We’re told that if we don’t receive the funds before settlement, we won’t receive them at all, because you can’t use KiwiSaver on a house that has technically already been purchased.

“It’ll probably be fine,” says our lawyer.

Then came the most stressful few weeks of my life. We had to reapply for our mortgage despite being pre-approved, for anti-money- laundering reasons. Three days out from settlement we still don’t have our loan documents, and we’re on the hook for $500 a day in late fees. Eventually, the mortgage funds arrive in our account 2pm on settlement day. Talk about skin of your teeth.

One thing I was surprised to learn is that it’s perfectly standard to have to refund vendors their rates bill, for whatever they’ve paid in advance of settlement. After you’ve paid them more than a million, you’d think they could let a couple of grand slide. Imagine selling a car and asking the buyer to refund you the WOF and rego!

All of that’s behind us now. We shifted into our first owned home together three days before Christmas, and I expect to be unpacking shoes for months. Roll on the next 30 years, and hopefully that’s the end of our unexpected bills.

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