Planning and information is crucial for first property owners in the Wanaka area

TIM BREWSTER

First home buyers in the Wanaka area have seen entry level prices rise an estimated 40 percent in the past 18 months, and planning is needed now more than ever, a local mortgage adviser said.

One local family who wished to remain anonymous said the challenge of buying a home in Wanaka has led them to look further afield.

"As a first home buyer in the current market we need to have a deposit of at least $120,000 plus for the lower end price range of homes in Wanaka of $600K plus, which are not necessarily suitable for a family. Unless you have that you can't purchase here. With rentals at around $600+p/w for a suitable family sized house for us, it makes looking in other regions as the sensible and only option to purchase a home.”

The family said Wanaka is becoming more and more exclusive due to living costs and may be affordable only for the top one to three percent, or singles or couples who can flat together and share living costs. "We'd rather raise our family in a more diverse socio-economic culture anyway,” they said.

With an estimated 70 percent of his work with first home buyers, Mike Pero franchise holder Mark Magill has been advising Wanaka property buyers since 2008, and believes tools such as Kiwisaver and the Home Start grants are often underutilised. A lack of knowledge of the building process and costs also contribute to the difficulty of securing finance for buyers, he said.

With the current competitive market, buying an existing house can be difficult, and one result is more and more people are building as there are more sections available.

"There are more finance incentives for people to build, however it is a longer and more complex way to get into a house. It’s really hard for a single person.”

A first home buyer he assisted 18 months ago bought a section in Albert Town for $150,000 with the house build costing $300,000. The house has recently been valued at $750,000.

With sections in Luggate and Hawea now at the $250,000 level, a thorough understanding of the process is even more crucial, he said. "People need to have a clear plan based on sound information. If you don’t, talk to someone in the industry to help you make one. To use a rugby analogy, if you don’t know where you are in the field, you won't know how far away the try line is.”

A real estate report in the Wanaka App earlier this week showed house prices in Wanaka starting at $647,000 with sections having a median price of $458,000.

PHOTO: Wanaka App