How two millennials beat the Auckland housing market

Auckland couple Kate and Willem van den Bergh were priced out of the housing market.

They desperately wanted their own place and to stop renting for good, but they couldn’t afford it.

Then they stumbled across the tiny house movement – where people live in small homes and live simply – and knew this was their key to home ownership.

juno kiwisaver tiny house auckland tinyhouse5.jpg

Fast forward a couple of years, and the couple now live in their personally-designed tiny house, a 32-square-metre portable home on Waiheke Island. They’ve been there over a year. Expecting a baby any day now, the couple have even set up a tiny nursery.

The couple had been married for a year and were spending NZ$550 per week on rent in Browns Bay, on Auckland’s north shore.

“Our situation was looking pretty bleak,” Kate says.

“Like a lot of young couples, we were trying to get our first foot on the housing ladder. But the house prices were just going insane – we were expecting to just be a part of the generation of renters.”

juno kiwisaver tiny house auckland tinyhouse3.jpg

Kate knew a friend who built a tiny house for just NZ$24,000. She got Willem on board and soon their plans to build their own tiny house were put in action – they were determined to be homeowners.

“At the time, we were thinking how on earth could we get into our own house, out of renting, but still wanted to be close to family and friends in Auckland,” Kate says.

“Then this came along, and it seemed like the perfect way to do it. I thought, this is brilliant, let’s do something similar.”

They moved in with Kate’s mother for nearly two years while they saved to build the tiny house and purchase their own piece of land.

juno kiwisaver tiny house auckland tiny house 1.jpg

Willem, an architect, designed it, and the couple purchased land on Waiheke Island. They used their savings to build the tiny house, and KiwiSaver balances and a mortgage to cover the land purchase.

Kate says without their KiwiSaver money, they wouldn’t have been able to afford to buy the land.

The tiny house cost NZ$96,700 and they purchased their own land – nearly half an acre.

“With the cost of the tiny house, consents, services and the section, our mortgage currently costs us NZ$854.45 per fortnight which, when we include bills, is about the same as what we were paying in rent,” Kate says.

Living in a small space has been easier than they thought, says Willem.

“I thought we may end up having a lot of arguments, because you’re living within eye-contact of each other all the time, but living so close to each other has been really good for us,” Kate says.

“I’m not a minimalist. I am a bargain hunter at heart. You have to be careful with what you buy, because the small space can quickly feel cluttered. it also makes you think about the things you do buy and how much use you will get from it.

Because they bought the section the tiny house sits on, and it will remain on the section indefinitely, it required resource consent and building consent for the services and concrete pads the house sits on. The home’s still moveable, but having the piles means it’s more secure.

The couple want to build another small home on their section once their family outgrows the tiny house. While it won’t be another tiny house, Kate and Willem want to keep it simple and compact. They plan on using the tiny house as visitor accommodation later down the track.

“I think that’s what I like about tiny houses, they’re very adaptable to your life,” Kate says.

“The tiny house has given us the opportunity to buy our dream section which later can be developed to include our future family home. The tiny house could eventually become a home and income. We are slowly working our way up the housing ladder, without instantly being caught up in a stressful mortgage.

Kate says they’ve spoken to countless people about their tiny house – people are very interested.

juno kiwisaver tiny house auckland tinyhouse2.jpg

“Before we started building, we talked to a couple of investors who thought it was a bad idea, because we weren’t doing it the traditional way and you could lose money. They thought it wasn’t an asset.”

But Kate says the beauty of the tiny house is that you spend money on building it, then you live in it, and at the end you can sell it on. Plus you’re not wasting your money on paying rent.

You might not make a profit, Kate says. “But you have a minimal mortgage and you’re not paying rent, so it does make you money.

“We have people contacting us all the time wanting to come and have a look, and asking how they can build their own. It's a way of life that appeals to so many people, whether they are wanting to get their first home, or are downsizing for their retirement, or just getting out of the renting trap. Sacrificing a larger home for a tiny home is well worth the freedom you get in return.”

Published 27 February 2019

Pie Funds Management Limited is the issuer of the JUNO KiwiSaver Scheme. You can read our Product Disclosure Statement here. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser. All content is correct at time of publication date.