House hunting

So we've been here for less than three months, and we said that we'd probably wait a year or more before deciding to buy a house, but here we are, shopping for a house. We are going to buy a house. We just don't know which one yet.

A few things have led to this. First, we found jobs much more quickly than we had ever dreamed possible, so we barely had to dip into our savings. This means we have enough for a down payment.

Secondly, it would seem that house prices are starting to go back up again as the market recovers. We'd rather buy now, while they're still low, than a year from now, when they're up again. It's supposedly a very good time to buy a house right now.

Also, mortgage rates are lowish now, and probably only going to go up. New Zealand mortgage rates are a bit higher than they were in America. We had a 5.5% 30-year fixed mortgage in America, a creature that doesn't even exist here. The best we can hope for here is a 7% fixed rate for 3 years or so, and then a floating rate for the next 22 years.

Finally, we just have this feeling that we are not going to be leaving NZ anytime soon. So we want to be homeowners. We don't want to renegotiate a lease every year, or worry that our landlord might decide to kick us out. And we don't want to be stuck with ugly carpet.

So we've been pre-approved, and we're going shopping.

The first thing we noticed that's different here is that buyers don't generally work with real estate agents, but lawyers are always involved. So we have a lawyer, but no agent. This means that we do all the searching ourselves, and then when we find something we want to buy, we have the lawyer do the paperwork for us. The lawyer will do what our estate agent in America had done - make sure the contract has all the right terms for us. But the lawyer will not negotiate the price. We will do that directly with the seller's agent.

We were very surprised to learn that most Kiwis don't bother getting a building inspection done when they buy a house. Our lawyer said that in his experience, only about 5% of buyers get a building inspection. This just seems like madness to us. The inspection will cost about $400, but considering the size of the investment, it seems like money well spent. So we will definitely be getting one of these done.

This brings us to the quality of New Zealand homes. Here are a few things that we are learing:

1. Heating the whole house is optional. Many homes are heated by a wood-burning stove, a pellet stove, or a gas stove. Basically, a stove. This will be in the lounge (living room). The rest of the house is cold, but can be heated with a plug-in heater of some kind or another. Central heating in homes is almost nonexistent.

2. Insulation is optional. Most old houses have none at all. Newer homes and renovated homes might have insulation in the ceiling or some of the walls. You can't take it for granted that a home is insulated. Usually if it is, this will be advertised. There is a push now to add insulation to homes, and the government currently offers a subsidy to add insulation to your house if you need it.

3. Facing north is really important. As we're in the southern hemisphere, the sun is to the north. Having the sun shining into your windows makes a dramatic difference in the temperature of your house. This is closely related to items 1 and 2 above.

4. They won't always tell you how much it costs. We're finding this kind of annoying, because we just want to know how much money the house costs. If it's too much, we'll move on. But instead of advertising an asking price, many sellers either say "POA" (price on application? we're not sure) or "auction." We're not even going to get into the auction thing - it's just like it sounds. The hammer drops and you own a house. No thanks. So we're mostly sticking to the houses that have an asking price, which is about half of the houses on the market. I suppose if we found one that was just that incredible but up for auction, we might try to make an offer before auction day. It seems that some people do that.

So we've been to about 10 open homes (at least) in suburbs all over the Christchurch area. Should we live in the city? Or by the beach? Or in the hills? Or on the other side of the hills? So many choices, each with their own benefits and drawbacks.

The photo above is from a house advertised for sale. It's really important to imagine these houses with the present furnishings removed.