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Infographic: The Kiwi Dream – Then & Now

Thursday 9 April 2015

MEDIA STATEMENT

The Kiwi Dream – Then & Now

Aucklanders’ version of the long sought-after Kiwi Dream is evolving as the latest generation of buyers adapt to changes in lifestyle, finances and housing stock.

An infographic released today (attached) by Barfoot & Thompson compares and contrasts the typical first-home buying experience of ‘the parents’ – those who purchased in 1979 or prior, and ‘the kids’ – those who purchased between 2010 and 2015.

“Auckland’s property market is a popular topic of conversation, and often we hear comparisons between generations’ experiences. This research was a chance for us to better understand what has really happened in this specific part of the buyer market over the years,” says Barfoot & Thompson Managing Director Peter Thompson.

“There is quite a lot of common ground, but there are also clear indications that today’s first-time buyers are adapting to new challenges that their parents’ generation simply didn’t face to the same degree.

“Some aspects of the results are concerning, but the overall picture is a promising one where we see today’s generation heading off the challenges and modifying the traditional approach in order to make that first step onto the property ladder.”

[release continues below]


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First homes are now less likely to be ‘the family home’

Not unlike other life milestones, Aucklanders are buying their first home later in life. While the vast majority (77%) of the ‘parent generation’ were in their 20s when they moved into their first property, nearly half (52%) of recent buyers are purchasing after their 30th birthday.

More recent buyers are also less likely to purchase with a partner or spouse (63% compared to 88% respectively) and are less likely to have children when they enter homeownership (25% compared to 41% respectively). More first-time buyers are now going it alone (23%) or purchasing with a family member (13%). Around one-in-ten (9%) are investors and don’t live in their first property.

It’s much tougher to get on and stay on the ladder

While decades of buyers agree that buying your first home is financially challenging, the tests are more intense and more prolonged for those buying today.

Nearly half (47%) of all 1,019 people surveyed agreed that ‘buying my first home put me under a lot of financial pressure’, and 53% of all respondents agreed that ‘I had to make significant sacrifices to my lifestyle when I bought my first home’.

However, a noticeable financial change over the decades is the length of time to actively save a deposit, with 66% now taking 3 or more years compared to the majority of the parent generation (63%) doing so in just 2 years or less.

Unlike their predecessors, recent buyers also continue to feel under financial pressure well beyond settlement day. While more than half (53%) of the parent generation said they found no challenges in keeping ownership of their first property, recent buyers say the opposite citing mortgage payments (39%) and maintaining the property (21%) as their main difficulties.

A lack of new housing stock is having a multi-layered effect on first-homes buyers

More than half of buyers from the 1970s or before moved into a ‘new home’ (51% bought ‘off plans’, ‘as new’ or ‘near new’), while just 27% of those purchasing in the last five years have been able to do the same. Strikingly, just 6% of recent buyers surveyed purchased off plans, versus 28% of those buying in prior to 1980.

Competition for housing stock is also a more recent issue, with 14% of recent buyers indicating it as their biggest challenge when buying a house, coming in just behind ‘price’ and ‘finding the right type of property’. No respondents from the 1979 or prior group felt competition was a challenge when they bought.

With old housing stock also comes a greater need for costly and time-consuming redecoration and renovation work. The Kiwi love for DIY aside, more than 73% of recent buyers said their homes needed some level of work, with 28% needing more substantial renovation. This compares to less than half of those purchased in the 1970s or before (49%), with only 17% needing renovating at some stage.

The 3-bedroom house is still #1 – but it’s losing ground

Across generations, the standard 3-bedroom detached home less than 20kms from the central city is the most popular buy, however smaller properties are increasing particularly for the most recent buyers.

Apartments are beginning to feature more at 8% of those purchased since 2010, up from 4% the previous decade and just 1% in the 90s. Alongside this, section sizes are decreasing. While the majority (71%) of sections of the past were 600m2 or more, today most sections (62%) are under 600m2 or less, with 35% on less than 400m2.

About the Survey

The Barfoot & Thompson First Home Survey, conducted by TRA, questioned more than 1000 Aucklanders about their first home purchase including when, what and how they purchased. Respondents ranged from very recent purchasers, to those who bought their first house prior to 1970. The margin of error on the sample of 1019 respondents is +/- 3.1%, at the 95% confidence level.

Barfoot & Thompson are partners of TV ONE’s Our First Home (Sunday, Monday and Tuesdayat 7.30pm). The series follows three families as they put everything on the line to help their children onto the property ladder.

Ends


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