City Sales Lobbying For Banks to Lend on Smaller Apartments

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Auckland real estate company, City Sales is lobbying for banks to lend on smaller apartments to help first buyers into the market. 

Many banks demand 50 percent deposits from customers wanting mortgages on smaller apartments, making the most affordable homes unaffordable for the very people Government wants to help into the property market – first home buyers. 

Scott Dunn is a licensed real estate broker with City Sales, which specialises in the Auckland apartment market. He says the firm has stopped even showing small apartments to first home buyers unless they have a 50 percent deposit. “It’s a waste of time – we know the banks will never approve itThey see the smaller ones as higher risk.” 

But that rule is way too simplistic, he says. “Being risky doesn’t depend on size. Sure, there have been some apartment block disasters which have stung owners – leaky buildings mostly. But that’s not just small apartments. And there are also some great apartments – ones that were always sound, or which have been extensively remediated. 

Dunn names city blocks where he would happily sell an apartment to a first home buyer. The Statesman on Parliament St, for example, where studio apartments start at 29sqm and $380,000. He lived there himself as a tenant for six year, and knows it is good value.  

“You don’t want to live in a 30 square metre studio for ever, but it’s a first step,” Dunn says. Then you have a bit of equity and you will be in a position to move.” On being asked how many small apartments might be available in Auckland for first home buyers if the banks would lend on a 20 percent deposit. “It would be in the thousands. 

“As a country, we are trying to encourage first home buyers – the Government is saying it, the Reserve Bank. And the easiest thing for them to get into is apartments, because they are smaller and cheaper. 

City Sales has been an active part of the Auckland CBD and apartment market since its beginnings. Their voice is opinionated, authoritative and influential, so for more information on buying and selling apartments please go to http://www.citysales.co.nz . 

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