Why your Granny’s two bed unit is now appealing to first time buyers
When spatial designer Toni Brandso first started looking for a place to buy, she had a very clear picture in mind of what she wanted: a stand-alone home, with a garden, in the city.
While she didn’t have a lot of cash – her budget was about $500,000 in 2016 – she wasn’t ready to move out to the suburbs. She was 35, single, and enjoying life in the city, so her agent took her to a lot of places, before finally convincing her to take a look at a little two-bed unit in Sandringham, Auckland.
“It was definitely not my dream, but she just talked me through it, told me what the opportunities could be, and that it was safe and secure, which suited me as a single person in the city,” says Brandso.
“I guess I had to change my mindset. Because I wanted the city I had to change what style home I was going for.”
While it was musty and in need of a spruce up, it was open-plan, had two bedrooms and got morning and afternoon sun, so the whole unit it was very light and airy. She could see the potential.
“It ticked all the boxes I had, except it wasn’t standalone – but I couldn’t afford standalone.”
What she could afford was the unit, and a little money to redecorate, which she spent the next year doing, eventually turning the musty old ‘granny flat’ into a pretty, airy, bachelorette pad in the heart of the city.
In the past, units like Brandso’s, in a 60s block, close to public amenities, have been the preserve of downsizers, and elderly parents, perhaps after the kids had grown up and left home, or a partner has died and left them rattling round the family home alone.
Some were expressly built as a kind of proto-retirement village – single storey rows, or groups of duplexes, and sold as a cross-lease, managed by a residents group or even a body corp. Sometimes the rules would stipulate an age limit – such as owners must be over 55 or 65.
But now, it seems like the demographic of who buys units is changing.
“First home buyers are focused on getting into the market, and they are looking for affordability of money and time,” says Christchurch estate agent Leeann Marriott, of Harcourts Gold, who often has one and two bed units on her books.
One example, in Riccarton in Christchurch, which has been renovated to a high spec, has mostly had first timers coming through to see it, she says. She puts this down to the price point compared to stand-alone homes in the same area. The average for the area is about $750,000, but this unit is on the market for $469,000.
In contrast, “there have been very few downsizers looking at the property,” says Marriott.
Units are a “good stepping stone onto the property ladder”, says New Plymouth based real estate agent Nikki Keegan, of First National, who has several on her books at the moment.
“[Units] have found a new market, and now people have got such busy lives they don’t want big homes. Or they’ve come from abroad and travelled, and they’ve realised they don’t need such a big space.
“I’ve got single people looking, mums with their kids looking because they’re separated, I’ve got a young family, mum, dad, and a daughter [looking for a first home]. The price is good, and they won’t be stung with lots of maintenance issues, because they are relatively new and low maintenance.”
First time buyers know it’s important to get into in the market “rather than sitting to the side waiting for the next new market to arrive”, so they’re snapping up what they can afford, says Marriott.
“But be mindful of cross-lease situations and what you are able to and not to do with a cross lease. Some don’t allow for animals and some have age restrictions. You should also ensure the flat plan is representative of the actual layout.”
This little 60s built home has a charming, and hip secret.
Brandso sold her unit in 2021. While she didn’t wish to share how much the property went for, she said it did allow her to step up the property ladder into the kind of home she’d been dreaming about when she was looking for her first home, back in 2017.
“I’ve moved into a little standalone bungalow. It’s bigger, but not wildly bigger, and it’s got grass out the front and back and a deck, so it’s got that indoor outdoor living. The unit had that a little – I put couch at the front when I owned it – but this has flow.
“[The unit] helped me get to the next level definitely. I think any property in Auckland would do that. It’s about getting a foot in the door.”
What to know about buying a unit
There are several types of unit ownership in Aotearoa New Zealand: unit titles, cross leases, and sometimes company shares.
According to the Real Estate Authority, under a unit title, the property is owned by a body corp, of which your share, or unit, is a part.
The body corp will be responsible for the care and management of the property’s shared areas. You will pay a levy to the corp for this. Each corp with have rules and requirements you can ask to see, and minutes you can inspect before buying.
A cross lease gives joint owners a proportionate share of the property, which is owned freehold – there will be no body corp levies, each owner will be responsible for their own property.
Before buying a cross lease property, it is crucial to ensure the layout of your unit is correctly described in the build plan, or the lease could be considered “defective”. Fixing that could cost a lot of money.
Agents selling units on a cross lease should have access to the lease documents, which contain any limits or restrictions you need to know about before buying, such as whether you can make alterations to the unit, or build on land around the unit.
Company shares are more common in apartment blocks. A company share means the building and units within it are owned by a company – the company may also own the land, or it could be leasehold. Buying a unit here, means you either buy a share in that company, or you buy a right to reside from the company.
Your rights, limits and obligations will be outlined in the company constitution.