‘One car park, maybe two’

Imagine you earn $80,000 a year, are prepared to borrow five times your salary, and have a $50,000 deposit. Can you buy a house in Wellington?

The obvious answer is no. And the short answer from an office of real estate agents is you could buy ‘‘one car park, maybe two’’.

Wellington’s inflated house market has become infamous, with the median house price exceeding $1 million and headlines practically vying to foretell doom. New figures from Trade Me Property published yesterday prompted a commentator to say the Wellington market was ‘‘running hotter than any other market we’ve seen before, including Auckland’’.

But our hypothetical buyer is optimistic and begins their search on Trade Me anyway, adjusting their expectations as they adjust the website’s search filters.

If we assume that hypothetical buyer works in the city, they might also wish to live in one of Wellington’s inner-city suburbs. And at first glance, they might seem to be in luck. There are currently 52 properties, in the city, listed at $500,000 or under.

On closer inspection, however, virtually all of those properties are one-bedroom apartments.

The prospective buyer could choose from a bolthole apartment in Kilbirnie, or an original 1960s onebedroom house in Mt Cook.

Jane Higgie, the listing agent for the Kilbirnie property, says the onebedroom apartment is ‘‘perfect for professional couples or singles’’. But even with the advertised storage space and car park, the 50-square metre flat would be considered a foot on the property ladder at best.

Undeterred, our hypothetical buyer abandons their city search in favour of the wider Wellington region – including Masterton, Carterton, the Hutt Valley, Porirua and the Ka¯ piti Coast. That concession, unfortunately, heralds more of the same. But not a whole lot more, only 94 properties in total. The onebedroom properties grow in variety at least, or you could opt for a boat shed in Paremata.

Thankfully for our buyer they begin to find small pockets of larger homes. There is a derelict twobedroom property in Masterton, with the listing inviting prospective buyers to ‘‘detonate or renovate’’ the rundown house. That house is built on a 627-square metre section with a large backyard, and is located within short walking distance of a train station.

At this point, our buyer decides to restrict their half-a-million search to houses with three bedrooms or more. Except there are only 17 currently listed on Trade Me. There is a threebedroom house in Porirua, which, it would be fair to say, has seen better days. The listing calls the home an ‘‘entry-level opportunity for firsthome buyers’’, or a ‘‘great excuse to renovate for investors’’.

Our buyer might begin to consider the nuclear option at this stage: leaving Wellington. They land upon Levin as their ideal destination, known, appropriately, as ‘‘the housing crisis holy grail’’. There are 10 properties listed in total.

What do the experts say?

Tommy’s Real Estate agent Mark Coffey says there is ‘‘virtually nothing’’ for buyers with a $500,000 budget.

Possible alternatives are properties tied to company shares; an option where the buyer owns a share in a company that gives them an occupation licence. Another option is leasehold titles, where the buyer owns the building but not the land.

Both options are compromises, however, and neither is ideal for a first-home buyer, Coffey says.

Infometrics principal economist Brad Olsen recommends asking questions if a price looks too good to be true. ‘‘Has it got some sort of different title? Is it a possible leaky home? Does it have greater earthquake issues, inability to get insurance, or similar? You’d think you’ve won the lottery, but something in that price range should ring alarm bells.’’

The house that fits within a person’s price range, in a place they wanted to buy, was often a ‘‘golden egg’’ in today’s market.

The average household income required to service an average mortgage was $171,000 in Wellington city. Nowhere in the wider Wellington region required a household income less than $89,000.

The last time Wellington’s average house price dipped below $500,000 was in 2008, when prices averaged $491,240 according to CoreLogic.