A story of hope for Natasha and Vivek
For a couple who are on top of their finances and working diligently towards their goals, the first home dream is still fraught with uncertainty.
Just over a year ago young immigrant couple Vivek Thirani and Natasha Dalmia decided to pursue buying a home together. Unfortunately, they were confronted by a shaking housing market made plain by rapidly changing interest rates and shifting deposit requirements. Since then, the pair have put house-hunting on the back burner and pragmatically adjusted their dream of owning a home before thirty. We caught up with the couple to learn about their informed view and the conditions which might tempt them to again consider home ownership.
After marrying and considering their goals, Vivek and Natasha looked toward buying a home in Aotearoa. Yet precisely at this time, the market peaked and even with enough funds for a down payment, the couple found themselves in the daunting position of deciding whether to buy in an inflated market. Vivek speaks about the initial impossibility of making a decision while housing prices rapidly changed, “every time we’d decide on something…the house prices would be up by another 50k.”
All the while banks changed their minimum deposit requirements from 10% to 20%, and interest rates soared. When these rates got to 6% and 7%, the couple pulled out realising the stress and the risk of losing money just didn’t make sense; especially when they could keep their money in investments providing them with secure returns. Since their pragmatic decision to wait for lower interest rates and disengage from their dream of living in their own home, Vivek and Natasha have explored alternate options and possibilities for climbing onto the first rung of the property ladder.
One such possibility was a $600,000 apartment in Manukau with an established tenant. With plans to continue renting out the home and put the funds directly toward mortgage repayments for the property, it seemed a sensible investment opportunity—a “dream deal” Natasha calls it.
Yet interest rates kept rising, and by the time finance came through, the property was 60k more expensive and no longer affordable.
The couple has also explored moving out of Auckland central to far-flung suburbs such as the “deep West”, or relocating to Christchurch, where Vivek completed his master's in 2015. Neither of these options met their priorities of spending time together, avoiding twelve-hour days stuck in traffic and enjoying spontaneous outings granted by living within inner-city Auckland.
As immigrants, Vivek explains enjoyment of life is important “you're away from home, you're away from everything… you want to enjoy what's there rather than just going to a corner.”
Recently the couple has been made aware of another, more promising option for entering the housing market: buying an investment property in partnership. Far from the initial dream of living in a home of their own, but a practical solution for jumping on the housing ladder. Vivek speaks of the potential ease of renovations with his construction background and the possibility of low-risk returns. Natasha adds the Aera model is also suited to first-time buyers unable to save the whopping 20% deposit most banks require. Aera makes ownership accessible by allowing those with little to no deposit to buy, requiring from just 2.5% of the house deposit.
Financial and investment know-how are ways Vivek and Natasha have accumulated enough capital to contribute to their deposit. Vivek speaks of placing importance on ensuring a fixed percentage of their salary goes into investments no matter what, “first you invest, then you spend.” Apart from their financial knowledge, the couple cites their upbringing as preparing them well for saving, while not compromising on lifestyle. As Natasha puts it, “lifestyle is very subjective…for us, it’s more important to be smart where you put your money.” She speaks of prioritising: going out once a week for a meal rather than doing it every night, “balance is very important.”
With a view of the rising sun and a convenient location, Vivek and Natasha’s affordable Mount Eden rental grants them an easy lifestyle: it’s close to work, eateries and entertainment, and their landlord leaves them to it. Natasha states that apartment-style living is easy “we lock the door, we walk out… we’re secure, we’re safe”. Understandably they don’t feel a sense of urgency to leave, especially due to their understanding of the hidden costs of owning, naming “insurance, council rates and maintaining the house” as obvious downfalls of home ownership.
Ultimately, Vivek and Natasha are after balance, not stress. They’re careful not to rush into home ownership because their aims are clear: they want to live a good life, with the ability to travel and visit family back in India, and they won’t let an ill-selected property jeopardize these priorities. Vivek and Natashas' contentment with their rental and lucid understanding of the housing market begs the question of what exactly will entice them back to pursuing their own home. For this couple, the answer is interest rates below 4%. Vivek sums it up, “everything needs to fall into place… we do not want to get stuck paying our mortgage off.”
