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The future Auckland market – who, what, when and where

The future Auckland market – who, what, when and where

The home ownership dreams of young Aucklanders bear a striking resemblance to those of previous generations, according to the second installment of a new survey looking at their future living plans.

“With a growing city, housing needs now and into the future are a hot topic. In the second part of our survey we asked young Aucklanders what they envisage for their first property purchase,” explains Barfoot & Thompson Managing Director Peter Thompson.

“It provides an interesting glimpse into what the future market could look like, and poses some compelling questions around how this market’s needs and wants might be met.”

The company commissioned a survey of more than 500 Aucklanders aged 18 to 34 who are yet to own a property, asking them about their future living plans and confirming the enduring strength of the Kiwi Dream. This is the second survey on the topic of first home ownership conducted by the company, which is again partnering with TVNZ’s family renovation show Our First Home.

An overwhelming 91% aspired to own their own home, and of them, nearly half were taking action towards achieving their dream.

Who
While nearly one-in-three respondents who are keen to own a home are considering going it alone, 62% intend to purchase with a partner.

“This may be as much a financial reality as it is about settling down, but it is in step with what many first home buyers have done before them,” says Mr Thompson.

“The number thinking of buying with family or friends in future is relatively low and comparable to those who purchased their first home between 2010 and 2015, whom we questioned in our original First Home Survey last year,” he added.

What
The aspiration for a stand-alone house is still strong, with 70% of home-hopefuls aiming for their own little slice of paradise, while only 9% are considering an apartment.

However, the youngest of those surveyed, aged 18 and 19 years old, were more than twice as likely to choose an apartment (22%) as their first property.

“The apartment market in Auckland is growing with considerable pace, and while there are some first home buyers, there are equally as many luxury downsizers and investors.

“So while these small numbers may point towards a growing desire for high-density living among younger people, many first-timers are still after a stand-alone home.”

Becoming a landlord was a more likely option for those looking to buy in the next couple of years (15% vs 6% of those looking to purchase in three or more years).

When
For many, home ownership is still a long-term dream, with 31% of those wanting to buy their own home saying it is 10 or more years away, including 14% who think its 15 or more years away.

Of older respondents, those aged 25 or older, 55% say home ownership is still five or more years away, including a third who say they’ll be able to purchase after 10 years or more.

“Based on these figures, the aging of the first home buyer market is likely to continue. Our previous research has already shown that while the majority (77%) of first home buyers in 1979 and earlier were under 30, around half (52%) of those who bought their first home more recently, between 2010 and 2015, were 30 and over.”

Just 14% of 18-to-34-year-olds who want to buy think they’ll be able to do so in the next two years.

Where
Most of Auckland’s young aspiring home buyers would still consider buying in the city (74%), however the surrounding regions of the Waikato (considered by 15%), Bay of Plenty (13%), Wellington (10%) and Northland (10%) were the next best alternatives.

Buying in Auckland also means that 43% of the future market anticipate paying $700,000 or more for their first home, while just over a quarter (29%) are expecting to pay between $500,000 and $699,000.

Outside Auckland, however, only 8% would expect to pay more than $700,000, while more than half (48%) expect to pay under $400,000.

ENDS

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