PHOTO: With no debt, a monthly savings record and money in KiwiSaver, they initially expected to buy a house worth $650,000. But they were approved for less than $600,000. 

A first-home buyer says owning a two-bedroom apartment in northern Auckland costs around $20 a week more than renting.

It comes as record-low interest rates make it cheap to borrow and raised house price caps in certain areas make it easier to get the First Home Grant.

But rising house prices make it difficult to get onto the property ladder, with the nationwide average asking price reaching $839,035 in April ($1.099m in Auckland), according to realestate.co.nz.

After realising house prices weren’t going to plummet after COVID-19 and looking for a first home that was “not our dream home but also not a dump”, Randy Alingalan and his wife decided it was better to get out of the rent trap.

Their 2-bedroom apartment in Gulf Harbour cost $512,000, for which the mortgage repayments, body corporate fee and rates add up to just over $500 per week. As homeowners, they pay $20 a week more than the $480 weekly cost to rent a small house near Albany.

“Knowing that our payments are merely [an] investment in our house that appreciates in value as opposed to paying rent where we just seem to throw our money away, we decided to go for it,” Alingalan said.

Having saved a deposit over two years, using the “old-school” system of putting cash in envelopes to help them “spend wiser”, the couple, who are migrants to New Zealand, used both of their KiwiSaver savings towards the deposit.

With joint income less than $150,000 and as the apartment was under the $625,000 price cap for existing homes in Auckland, they were able to get the First Home Grant.