Apartments: The new Kiwi dream?
The Kiwi dream of a quarter acre block on a quiet cul de sac in the suburbs is still alive and well, but such properties are often beyond the financial means of many first home buyers. Should you consider comparing mortgage rates and using your home loan to purchase an apartment instead?
Apartment living is on the (high)rise
Mullets may have come and gone, and floral-print wallpaper might have fallen from retro into passé, but one trend that has remained constant over the years is the great Kiwi migration from house to apartment dwelling.
Nowhere is this movement more noticeable than in Auckland. The number of Auckland apartments skyrocketed from 9,876 in 2006 to 15,645 in 2013, according to census figures reported by Statistics New Zealand. This represents an incredible increase of 58.4 per cent!
Why are apartments becoming more popular?
It’s easy to understand why so many people are moving into apartments. Not only are they generally more affordable than free standing houses, they also offer a level of convenience that can’t be found in the suburbs. The practical benefits of living within close proximity to work, schools, transport routes and other key infrastructure should not be underestimated.
Can you use KiwiSaver to buy an apartment?
In a word, yes. While there are some conditions to leveraging your KiwiSaver to purchase a home, there are no restrictions on the type of property you can buy.
However, as Bankers’ Association Chief Executive Kirk Hope explained, mortgage providers may be more cautious when lending to apartment buyers.
“When lending on small apartments, the bank needs to consider if it will get its money back in case of default. It may not where demand for very small residences is limited,” said Mr Hope, as quoted by NZ Herald.
When you are ready to take the next step, talk to one of our great experts, their service is totally free!
The PocketWise Team