Thursday, December 1, 2022

Struggling for Your First Home? (Who Isn’t?!) Introducing… A First Home Coach

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Ok, so you have an army of real estate agents, lawyers, mortgage brokers and very opinionated parents who all think they know just the ticket when it comes to finally buying your first home. But have you considered a first home coach?

Enter Matt Taylor (a millennial himself, which seems like a very important thing to point out) who is a co-founder of digital platform First Home Coach, a free website that aims to guide people into making the best decisions possible when finally getting on the property ladder.

And the biggest issue, he reckons? First home buyers need to get a reality check – and fast.

“Our data shows that most of our first home buyers are searching within the $550,000 to $700,000 bracket. Yet over 75% are expecting to purchase a standalone home with 3, and sometimes 4 bedrooms for this price. This expectation is leading to disappointment along with wasted time and money during their house hunt.”

Buyers need to remember their first home is almost never a forever home, Matt says, and that we need to let go of the traditional Kiwi quarter-acre dream and look towards apartments, units or terraced homes with a more modest backyard is the way forward.

“This is proving to be a tough shift for all Kiwis, but none more so than for first home buyers. Data shows that only 11% of our thousands of users are looking at purchasing a terraced home. Even fewer are considering an apartment.” 

Are your expectations too high for your first house?

And holding out for a quarter acre slice of paradise could see you throwing away over $500 a week in lost gains.

“History tells us that getting on the property ladder is a good way to ensure you’re benefiting from increasing house prices. For example, the median house price in Auckland increased $275,000* over the last 12 months; even if you were only targeting a 10% deposit, you would have to save $528 a week just to keep pace with the market.” 

We had a chat to Matt to try and unlock some of his secrets – and while he says the market is tough, buying your first home is still very much possible – so don’t give up!

Buying a house right now- especially in Auckland – and sometimes it seems simply not achievable. What’s the biggest barrier to home ownership right now? 

Getting a deposit together is hands down the hardest thing about first home ownership at the moment *collective sigh*

Interest rates are at all-time lows in Aotearoa making paying back a mortgage the easy bit. It’s probably even cheaper than the rent you’re paying. But saving a deposit takes months, even years, of dedication and forgoing that smashed avocado on toast in order to keep the bank account heading in the right direction.

Where should people even begin when they decide they want to buy a house? 

Get a plan together. Know what your desired first home is – location, house price, bedrooms, type of home – with that information FirstHomeCoach can help you make a monthly savings goal.

Then with your plan in place you can start to do real trade-offs, such as- If I am more flexible on the location of my first home then maybe I can have another bedroom, or maybe I can get into my first home six months earlier, because I don’t need as much for my deposit.

If you were buying a first house, what would you look for? 

This depends on life stage and your plans. Those first home buyers who already have kids seem to be the hardest done by because they need more bedrooms and space. But my view is if you can get yourself onto the property ladder as soon as possible, then you’re benefiting as the housing market moves higher.

There seems to be a bit of a difference between expectation and reality – what can a first home buyer realistically hope to buy? 

Our research shows that most first home buyers want to buy the kiwi dream – quarter acre, 3 or 4 bedrooms in the middle of the city. The reality is, if you want to be buying your first home before you’re 40, then it’s more likely to be a 2 bedroom terraced home in a fringe city location. Maybe even an apartment depending on how close to town or work you want to be. But that’s ok. It’s all about getting your foot in the door (see what I did there?), and you can always trade up and add another bedroom in years to come.

Getting your hands on these keys is totally doable – but it takes work, says Matt

Tell us a little about First Home Coach – you’ve essentially turned buying a house into a game? (Where someone actually wins!) 

Well everyone loves having fun, right? Buying your first home is such a grown-up thing. We thought we could bring a bit of fun to the stale process that was dreamed up by bankers and real estate agents. With FirstHomeCoach we help you work out how much you can borrow, make a home buying plan, get your ‘team’ together and then lay out the steps you need to take along with all the information in quick, jargon-free language. I mean, what’s not to love? Hard to swipe left on something that offers you all of that for free!!

What inspired you to become a First Home Coach? 

The struggle is real for first home buyers. So, when we were living in the UK and saw a cool solution there to a hard problem that young Kiwis were struggling with every day back home, we just wanted to help. We saw there was a huge gap in the information being handed out to first home buyers today. It was all boring, static PDFs and websites that left you trying to figure out where you fitted in and what to do next. We thought we could do it better, so when we got home to New Zealand we launched FirstHomeCoach.

What’s the deal with shared ownership, and do you think it’s a good idea?

As I said before, the deposit is the hard part for first home buyers. With shared ownership it certainly lowers the deposit required to get into your first home, as you aren’t buying 100% of the house. Shared ownership schemes are huge overseas so it was only a matter of time before they come to New Zealand. It can help you get into a home sooner, or maybe a bigger home than you could afford on your own.

When it comes to mortgages, do you have any tips for making the process as easy as possible?

Get yourself an independent mortgage adviser. They can advise you on the best mortgage from the range of deals on offer right across the market. If you talked to your main bank, then they are only recommending their own products.

Do you have one golden rule / tip you’d like all first home buyers to know? 

Don’t listen to the media, home ownership is achievable! Make yourself a plan, break it down into bite sized pieces, like a monthly savings target, and start saving. Owning your first home isn’t a right –  it takes hard work but it is achievable for those willing to make sacrifices in the early years.

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