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North shore - unaffordable dream?

North shore - unaffordable dream?

Old Sep 19th 2018, 7:45 pm
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Default North shore - unaffordable dream?

Hi, looking for some honest advice and suggestions please. We are moving to Auckland in November, my husband (a kiwi whos lived in the UK for nearly 20 years) has got a job and we thought/think it will be a great country to raise our kids (2 & 4). We have visited once and fell in love with Takapuna so would love to live around there, but I just don't know if its affordable. We will rent initially but will look to buy in a couple of years but I am worried we will settle the kids in school only to find we cant afford to buy in the area. My husbands job is going to pay $175k, which feels like a lot written down but I have read so much about Auckland being unaffordable that I'm now worried it wont be enough. I will also work once the kids are settled but don't know how much I'll earn, hopefully in the region of $90k, but we'll need to cover childcare obviously. Does anyone have experience of making the move recently, and is the Northshore (Takapuna, Milford, Devonport) completely unrealistic unless you have millions? Are there any other good north shore suburbs which are more affordable and a doable commute into the city? We are staying in Rothesay Bay for 6 weeks until we find a longer term rental, so just trying to plan where we are going to focus our search, Thanks in advance everyone!
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Old Sep 19th 2018, 8:01 pm
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Default Re: North shore - unaffordable dream?

HI and welcome,
$175 is a hefty pay packet but as you say Auckland is one of the most expenses places to live. I personally would not worry about trying to find an area to buy in but find an area you would like to live in and is safe for the family and has all your needs, be it close to beaches, hills, out in the sticks, has shops nearby, etc. Also any budget you are looking just keep to one salary, even though you say you want to work sometimes finding that second income is neigh on impossible and sometimes doesn't cover the cost of child care, expecting $90k I assume you have some skill that NZ requires so it may be easier for you but I would say don't rely on it.
I found this when looking for how much more costly Auckland is to other areas, https://www.numbeo.com/cost-of-living/in/Auckland
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Old Sep 20th 2018, 1:59 am
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Default Re: North shore - unaffordable dream?

https://www.barfoot.co.nz/market-rep.../suburb-report
The North Shore is very pricey. Your husband is in a great wage though. It partially depends on whether you are bringing over money towards a deposit. There are plenty of nice suburbs on the Shore. The ones closest to the sea and to the city tend to be most expensive. You could go further up the coast or a bit inland and pay less for a house, means a longer drive/bus to work or not being right by the beach (probably only a 10 min drive to various beaches from the inland areas though).
Here’s a list of Barfoot average sales for Auckland suburbs in July - if you scroll down you’ll get to the North Shore ones. Average suburb prices range from 770K to 1.7 million. The only suburbs I’ve heard are slightly less nice are bits of Birkdale and Beachaven - it’s all relative as most of the Shore is pretty affluent.
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Old Sep 20th 2018, 7:24 am
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Default Re: North shore - unaffordable dream?

$175k is a truck load of of money in NZ but the biggest deciding factors for affordability will be how much you have to bring to the party in terms of deposit for a house and/ or how much mortgage you would be willing / able to take on. You'll would need to raise about $1.5M of funds for a family sized home anywhere near to Takapuna, Milford or Devonport and maybe $1.2M elsewhere
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Old Sep 20th 2018, 7:54 am
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Default Re: North shore - unaffordable dream?

Originally Posted by Bo-Jangles View Post
$175k is a truck load of of money in NZ but the biggest deciding factors for affordability will be how much you have to bring to the party in terms of deposit for a house and/ or how much mortgage you would be willing / able to take on. You'll would need to raise about $1.5M of funds for a family sized home anywhere near to Takapuna, Milford or Devonport and maybe $1.2M elsewhere
It's not only deposit, but what if that job is gone one day? How easy would it be to get a job that pays the same salary? Too many people base their mortgage on the salary they have today and that's the problem.
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Old Sep 20th 2018, 8:06 am
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Default Re: North shore - unaffordable dream?

If you are bringing over a lump of money to put down against a house and happy to service a decent size mortgage that you can afford on your wages, you'll be fine. House prices will rise and if you are canny with a couple of moves, you'll be steady as in a few years time.
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Old Sep 20th 2018, 8:31 am
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Default Re: North shore - unaffordable dream?

Originally Posted by bearskin View Post
House prices will rise and if you are canny with a couple of moves, you'll be steady as in a few years time.
That's what some people thought in 2007.
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Old Sep 20th 2018, 8:55 am
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Default Re: North shore - unaffordable dream?

I really think that people get it wrong when they come over thinking that they have to get on the property ladder as soon as they can, we did that and it cost us dearly. 6 months in we bought as we had sold the house in the UK. 6 months later I was absolutely miserable, had to remove the kids from the school, hated the area and the majority of the people. had to sell at a loss and move to an area less parochial.
Have my time again and I would rent for at least 2 years and possibly move around the area a little
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Old Sep 20th 2018, 7:23 pm
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Default Re: North shore - unaffordable dream?

Originally Posted by Moses2013 View Post
That's what some people thought in 2007.
True. Those people could sell up and walk away with a million dollars if they wanted to now.
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Old Sep 21st 2018, 12:18 am
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Default Re: North shore - unaffordable dream?

Lot's of good advice. I would live somewhere for a year and get a feel for the place - you may feel differently about Takapuna after you've lived there - I'd probably go further up the coast. Yeah, sure rentals suck, but it's a blip in time in the greater scheme of things, and it might prevent you from making a costly mistake.
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Old Sep 21st 2018, 8:51 am
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Default Re: North shore - unaffordable dream?

Originally Posted by bearskin View Post
True. Those people could sell up and walk away with a million dollars if they wanted to now.
Yes, they walk away because they own the banks that money and can never pay it. The next crash will come and if you buy now, don't expect to see a house that's worth 1 million today to be worth 2 million in 3 years time. You also have to look at salaries and while the mortgage is based on todays salary, what do other companies pay?
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Old Sep 21st 2018, 10:03 am
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Default Re: North shore - unaffordable dream?

Originally Posted by Moses2013 View Post
Yes, they walk away because they own the banks that money and can never pay it. The next crash will come and if you buy now, don't expect to see a house that's worth 1 million today to be worth 2 million in 3 years time. You also have to look at salaries and while the mortgage is based on todays salary, what do other companies pay?
there wont be a crash. prices will stop rising once the silly season winds down but there will be no crash.
agents will still list at achievable prices but few will be realized. thats not prices falling, its sellers and agents getting a reality check
it will settle for while and climb again
there are too many bitter people crying because they missed out on the gold rush, willing the market to collapse probably so they
can jump on board and wait for the next stampede and cash in themselves
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Old Sep 21st 2018, 11:29 am
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Default Re: North shore - unaffordable dream?

Originally Posted by Justcol View Post
there wont be a crash. prices will stop rising once the silly season winds down but there will be no crash.
agents will still list at achievable prices but few will be realized. thats not prices falling, its sellers and agents getting a reality check
it will settle for while and climb again
there are too many bitter people crying because they missed out on the gold rush, willing the market to collapse probably so they
can jump on board and wait for the next stampede and cash in themselves
It's up to each individual and I suppose we humans never learn anyway. I have no interest buying property anymore and was lucky enough to buy in Ireland and Spain after the crash and happy to settle in Europe now. It's just natural and of course I was also happy that the crash happened in Europe, as it allowed me to buy at an affordable price and I don't know many who would be happy to buy at the peak price. I've seen enough people lose their homes and they were also told that a crash would never happen and their jobs would always be secure. Even New Zealand is not immune, so buyer be aware.
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Old Sep 21st 2018, 8:48 pm
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Default Re: North shore - unaffordable dream?

The housing market will only crash if the job market collapses. Then banks will sell off their assets as mortgagee sales and collapse the market. If you can keep your job and your marriage, you can sit it out and reap benefits when it turns, as it will. Otherwise, it will stall for a bit, while people take their properties off the market until it strengthens. The banks are the weak point at the moment.
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Old Sep 21st 2018, 11:26 pm
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Default Re: North shore - unaffordable dream?

There's not a single day that goes by without some article about Auckland's housing 'crisis' and the impending doom of a crash and what needs to be done about it - this has been going on for at least five years I can remember and probably more. Interest rates have been tinkered with, lending % rates have been tinkered with, immigration policies have been tinkered with, more housing consents and building is going on, overseas investment has slowed down currencies have tumbled, many people have cashed up and moved on and yet still not much sign of a let up in house prices.

To my mind there would need to be a monumental shift on one lever or another, in order to create a crash and of course we'll never see that coming. I really don't think NZ Government has anything much left in the arsenal to create a massive change in a short space of time. It might go tits up if interest rates rise and then newer buyers would no longer afford their massive mortgage payments but all recent talk suggest cuts to the official cash rate are imminent.
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