Looking further out, asking parents for a donation and buying off the plan are among the suggestions for first home buyers wanting to get onto the property ladder.
It comes as the property market continues to defy expectations, with average asking and median selling prices in Auckland now more than $1 million and nationwide above $700,000.
For Kiwis desperate to get out of their rental and onto the property ladder, Newshub asked a handful of experts which areas to consider and how to get in.
Where to buy
For a budget of $600,000 to $750,000, REINZ CEO Bindi Norwell confirms there are still standalone properties around.
In Auckland, the Papakura district and Franklin district (includes Waiuku, Bombay, Ramarama, Wattle Bay, Hunua and Tuakau), are among the ten areas with the highest percentage of homes in this price bracket.
"[The] Papakura and Franklin districts have 35.7 percent and 34.1 percent of properties sold in this range respectively," Norwell confirmed.
Areas outside of Auckland include Upper Hutt City, the Kaikoura District and Tasman District.
Among the areas least likely to have standalone houses in this price range are North Shore City, Auckland City and the Queenstown-Lakes District.
"Our advice to buyers looking to purchase in these areas is to consider options such as apartments or units or considering purchasing slightly further out from the city or with friends/family in order to be able to get a foot on the property ladder," Norwell said.
Ways to get in
Property investor and educator Steve Goodey gave the following six tips for first home buyers wanting to get onto the property ladder.
1. Tap on your parents' shoulder for a donation
"Don't make it a loan. Your bank will lend you less in consideration of the fact you will be paying it back to them," Goodey said.
Squirrel CEO John Bolton said a family donation can be an interest-free loan, with no ongoing responsibility to service it.
"It's referred to as a family loan: it's interest free, not repayable until after the property is sold and no encumbrance is put on the title," Bolton said.
Those who have a low deposit should bear in mind they'll need to contribute some of their own savings as well.
"For those that have a deposit less than 20 percent, the [banks'] expectation is that 5 percent of it has been saved," Bolton added.
2. Aim low
First home buyers can't expect their first home to look like the one they grew up in.
"If you manage to buy a $500,000 house with $100,000 deposit scraped together and it's a really horrible place, you're most likely still better off than having $100,000 in the bank at the moment," Goodey said.
"It's a property ladder and you'll probably have to step on the bottom rung."
3. Look for 'off the plan' houses
Buying off the plan means buying before a property is built.
"A lot of first home buyers in Auckland are buying either off plan or newly finished developments," Bolton said.
"The prices are known, for first home buyers it's probably one of the best ways to buy: you can put a deposit down now but don't have to settle until it's finished," Bolton added.
But there are extra risks. These include a developer not finishing the project or that the property value drops between sign up and settlement. For off plan purchases, banks require a registered valuation.
4. Buy with friend/s
Going halves in a house with another first home buyer or a group of close friends is another option. For example, one person has a deposit and the other provides extra income to service the mortgage.
"Write a letter of intention covering what you're trying to achieve with the purchase and figure out your exit from the arrangement before going in. Have the agreement looked over by a lawyer," Goodey suggested.
Bolton said buying with a friend can be a viable option, as long as people have a property sharing agreement.
"It's not generally a long -term strategy, but it is a way of getting into the market," Bolton said.
5. Rent out the spare room
A spare room could enable buyers to take on a border or flatmate, providing extra income to repay their mortgage.
"It's sometimes an option to buy as many bedrooms as you can afford, then live in the smallest room yourself while letting your flatmates fund the bulk of the mortgage payments," Goodey said.
"Generally, banks will only look at border income (1-2 borders) if you're single," Bolton confirmed.
6. Get finance approved then talk to real estate agents
Goodey suggests buyers enlist the help of the top five real estate agents in their area. They could tell them a realistic price range and that they're available to view houses at any time.
"Buying a house at the moment is a bit like a full-contact sport and you need to be able to move quickly," Goodey said.
Those buying at tenders and auctions often have to compete directly with other buyers who may have deeper pockets.
"Where possible, look for 'off-market' sales, private sales, or properties for sale 'by negotiation'," Goodey suggested.
People who contribute to KiwiSaver for three years or more can also get most of their money out to buy a first home. On top of personal contributions, having their employer and the Government put money in means their balance (and first home deposit), grows faster.
