The First-Home Buyer's Guide to Christchurch

Buying your first home is exciting. It can also feel like learning a whole new language, mortgages, deposits, LIM reports, building inspections, solicitors, sale and purchase agreements and settlement dates.

Where do you start? What can you afford? And how do you know you're making the right decision?

The good news is that buying a home becomes much easier when you understand the steps involved. You don't need to know everything on day one; you just need to know what to do next.

This guide walks you through the process of buying your first home in New Zealand, from getting your finances organised to collecting the keys.

1. Work out what you can afford

Before you start scrolling through property listings, get a clear picture of your finances.

Your budget isn't just about how much a bank might lend you. It's also about how comfortably you can manage the repayments and the other costs of owning a home.

Start by looking at:

• Your household income and regular expenses.
• Your savings and the deposit you can contribute.
• Existing loans, credit cards and other financial commitments.
• Mortgage repayments at different interest rates.
• Rates, insurance, maintenance and other ongoing ownership costs.
• The money you'll need for legal advice, inspections and moving.

A useful first step is to speak with a mortgage adviser or your bank. They can help you understand your borrowing options and what you may be able to afford.

2. Understand your deposit

Your deposit is the money you contribute towards the purchase price, with the balance generally funded by your mortgage.

Many banks have traditionally required a 20% deposit, but some buyers may be able to purchase with less, depending on lending criteria and the loan product available.

For example, on a $600,000 property:

• Purchase price: $600,000
• 20% deposit: $120,000
• 10% deposit: $60,000
• 5% deposit: $30,000

Your deposit may come from savings, eligible KiwiSaver funds, gifts from family or other acceptable sources, subject to your lender's requirements.

Can you use KiwiSaver?

If you've been a KiwiSaver member for at least three years, you may be eligible to withdraw most of your savings to buy your first home, provided you meet the relevant criteria. You generally need to leave at least $1,000 in your account and intend to live in the property. Apply through your KiwiSaver provider and allow enough time for processing.

What is a First Home Loan?

Kāinga Ora's First Home Loan scheme may allow eligible buyers to purchase with a deposit as low as 5% through participating lenders. Income, property and other eligibility requirements apply, and approval isn't guaranteed.

3. Build your support team

You don't have to navigate the process alone. In fact, getting the right people involved early can save you considerable stress.

Your team will usually include:

• Mortgage adviser or bank: helps you understand borrowing options and arrange finance.
• Lawyer or conveyancer: reviews legal documents, checks the title and guides you through the purchase.
• Insurance provider: confirms whether the property can be insured on acceptable terms.
• Building inspector: assesses the property's visible condition and identifies potential issues.
• Real estate professional: provides information about the property, the buying process and the terms of the sale.

4. Start looking for the right home

Now comes the enjoyable part: exploring properties.

Before attending open homes, write down what matters most to you. Separate your must-haves from your nice-to-haves.

Think about:

• Location, commute and access to public transport.
• Number of bedrooms and bathrooms.
• Outdoor space, parking and storage.
• Proximity to schools, shops and other amenities.
• Maintenance requirements and the property's age.
• Future needs, such as working from home or a growing family.

In Christchurch, it's also worth considering local flood information, earthquake-related land issues, insurance availability and the property's history. These matters can vary considerably between properties, even within the same suburb.

5. Do your homework before making an offer

This is one of the most important stages of the buying process. A property may look perfect, but you need to understand what you're actually buying.

Here are some key checks to consider:

• LIM report: a Land Information Memorandum provides council-held information about the property, which may include consents, planning matters, drainage and natural hazards.
• Building inspection: a professional inspection can identify visible defects, maintenance issues and concerns that may need further investigation.
• Record of title: your lawyer can check the legal ownership, title type, easements, covenants and other interests that may affect the property.
• Insurance checks: confirm that suitable insurance is available and understand any excesses, exclusions or special conditions before committing.

Depending on the property, you may also need a registered valuation, a drainage assessment, an engineer's report or other specialist investigations.

6. Understand how the property is being sold

In New Zealand, properties may be sold by negotiation, advertised price, deadline sale, tender or auction. Each method has different rules and practical considerations.

• Negotiation: you submit an offer and negotiate the terms with the seller.
• Advertised price: you can make an offer based on the asking price, although negotiation may still occur.
• Deadline sale: offers are invited by a specified deadline, although the seller may be able to consider offers earlier depending on the terms.
• Tender: you submit an offer under a formal process, usually by a stated closing time.
• Auction: buyers bid competitively. If you win, the purchase is generally unconditional, so your checks and finance need to be ready beforehand.

7. Make an offer and understand the contract

When you've found the right property, the next step is usually a written sale and purchase agreement.

This is a legally binding contract that sets out the purchase price, deposit, settlement date, included chattels and any conditions.

Common conditions include:

• Finance approval.
• A satisfactory building inspection.
• A satisfactory LIM report.
• A valuation, if required.
• Other property investigations or requirements specific to your circumstances.

8. From conditional to unconditional

If your agreement contains conditions, you'll need to satisfy them within the agreed timeframes.

For example, your lender may need to approve the finance, and your lawyer may need to review the title and LIM.

If an issue arises, seek advice promptly. Don't let a condition deadline pass without understanding your options.

Once all conditions have been satisfied or properly waived in accordance with the agreement, the contract generally becomes unconditional. At that point, you're committed to completing the purchase, subject to the agreement's terms.

9. Prepare for settlement day

Settlement is when the remaining purchase money is paid and ownership is transferred.

Before the big day, make sure you have:

• Confirmed your mortgage and purchase funds with your lawyer.
• Arranged insurance in line with your legal and lending requirements.
• Completed your pre-settlement inspection.
• Confirmed the settlement date and possession arrangements.
• Organised utilities, moving arrangements and key collection.

10. Don't forget the costs after you buy

Getting the keys is exciting, but home ownership comes with ongoing expenses.

Remember to budget for:

• Mortgage repayments and interest-rate changes.
• Council rates.
• Home insurance.
• Repairs, maintenance and unexpected expenses.
• Utilities and internet.
• Body corporate levies, if buying a unit title property.
• Gardening, appliances and other household costs.

Your first-home buyer checklist

• Work out a realistic budget.
• Speak with a bank or mortgage adviser.
• Check KiwiSaver withdrawal eligibility.
• Choose a lawyer or conveyancer.
• Arrange insurance enquiries early.
• Research suitable suburbs and properties.
• Review the LIM, title and building condition.
• Understand the sale method and contract conditions.
• Confirm finance and satisfy all conditions.
• Complete the pre-settlement inspection.
• Prepare funds and moving arrangements.
• Collect the keys after settlement is confirmed.

The bottom line

Buying your first home isn't just about finding a property you love. It's about understanding the finances, doing your homework, asking the right questions and surrounding yourself with people who can help you make informed decisions.

Take your time. Be curious. Don't be afraid to ask questions, and never feel pressured into making a decision before you're ready.

Your first home doesn't have to be your forever home. It needs to be the right next step for you.

Good decisions start with good information.

Let curiosity be your compass.