That Home Loan Hub
Welcome to That Home Loan Hub, your ultimate guide to mastering the world of home loans and property. I'm Zebunisso Alimova, here to simplify the complexities of real estate and provide you with expert insights and the latest trends.
Whether you're a first-time homebuyer, an experienced investor, or simply curious about the property market, this podcast is for you. Join me each week as we unlock the secrets to property success and help you make informed decisions. Let's dive into the world of property together!
That Home Loan Hub
Banks Treat Lifestyle Properties And Small Apartments Differently, And Your Deposit Might Not Cut It
The property looks perfect, the photos glow, and the price seems doable—until the bank says no. We take you behind the curtain on what lenders really want to see from first-home buyers and why certain properties make approvals harder than they need to be. If you’ve been torn between a tidy suburban house, a shiny apartment, or a dreamy lifestyle block, this conversation will help you choose a target that banks actually fund.
We start with the bank-friendly basics: standard freehold or cross-lease homes that are simple to value and easy to sell. Then we get honest about lifestyle blocks, where bigger land, outbuildings, and hobby-farm features often trigger a 30% deposit requirement and slow resale risk. Even marketing cues—paddocks, cows, multiple sheds—can push lenders to reclassify a deal as higher risk. From there, we dig into apartments: minimum size rules that often sit around 45 square metres including balconies, Kainga Ora concentration limits, body corporate fees, and the red flags buried in meeting minutes. If you’re counting on a low deposit, these details can make or break the numbers.
We also call out the structures most likely to derail a first purchase: company share titles and commercial or mixed-use properties that lenders view as poor security for owner-occupiers. And for the “buy it cheap and fix it” crowd, we explain why monolithic cladding and leaky-home risk can trap you. Banks anchor to purchase price, not future value, and they don’t like active issues at settlement—so the bargain can shrink your usable equity and complicate approvals.
By the end, you’ll know how to pre-vet a listing, what documents to pull for apartments, when to walk from a risky title, and how to align your deposit with the property types banks prefer. Ready to buy smarter and avoid avoidable noes? Follow the show, share this episode with a friend who’s house-hunting, and leave a quick review with your biggest first-home question.
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If you listen to the episode I've done with James, whether you should buy new house or an old house or an existing house if you're a first-time buyer, then listen up. This is the episode for you. This is part two of that episode. But I've got Jordan in the house. Hello, Jordan. So you were here listening in with um me and James, and you were like, I wanted to do that topic.
SPEAKER_00:I've got less uh more stuff I wanted to add in.
SPEAKER_01:Yes. So tell me now, this is part two. What do you want to add? Properties should first home buyers.
SPEAKER_00:I've got nothing there. That's it.
SPEAKER_01:Go for. Or not go for.
SPEAKER_00:So a couple of things I wanted to add on to that is when when you're a first home buyer, I feel like you you're you'll be looking at the whole market, I think. And you sometimes you think like everything is kind of a go. Unfortunately, that's not always the case.
SPEAKER_01:We're not on Tinder.
SPEAKER_00:It kind of seems a little bit like that, isn't it? You're just a bit of a bit of the old mighty Tinder.
SPEAKER_01:I can't believe I just said that.
SPEAKER_00:You just like you see a lot of pretty, pretty pazzes everywhere, and but some of them not not good. Not good. Red flag, red flag. But let's see, so everyone like you've got your standard kind of residential house, we say, you know, like your everyday Joe Blogs, like two free, four bedroom with a garage. It can be was it standalone freehold, or it can be cross-lease, usually, and the bank's pretty happy with both those, depending. You know, and that's that's a pretty good property to go for for a first home buyer. You know, pretty happy, pretty chill, chill vibes. Unfortunately, with lifestyle blocks, though, it's a bit of a different story. So they want you to unfortunately, you're required to have at least a 30% deposit with most banks. I'm not saying all banks, but like most banks will require you to have a 30% deposit. And what really you've got to think about what classifies as a lifestyle property. On the on the on the cancel records, it can be listed as lifestyle plus instead of residential or even rural properties. They they will want you to have a little bit more of a deposit. Some banks will allow a 20% deposit if you depending on the the situation of the clients, I think there's a lot more that goes into that, but for the most part, they don't like it. And it's funny, like they'll come back, even if it's not listed as lifestyle, you gotta be careful about this one too. If they've got pictures and they're advertising it as a lifestyle property, even if it's not a lifestyle property, the banks don't like that either. So if they've got cows or sheep on there, they're like, I don't know about this. And there's a there's a reason for that. They don't really like the idea of those multiple extra out buildings or or extra like land and stuff.
SPEAKER_01:So it's you've got to think about it as a monopoly, right? In terms of can I sell this off quickly if things go south? Yeah. So this is why, because most of the time, as a first-time buyer, you may not have a big deposit. And if the bank is taking a risk on you by giving your mortgage at a very low deposit, so the bank is actually taking a quite high risk of carrying 90% of your property value on them. So if you went belly up and you, you know, cannot pay your mortgage anymore, and the bank has to sell this property from under you to repay this debt, that's why they are a little bit, you know, more pedantic about this because reselling those type of properties will take longer. And same applies for apartments. So reselling those type of properties is not an easy task.
SPEAKER_00:I was gonna get on to apartments next, actually. But yeah, no lifestyle, it's it's and I feel like it's a lot of people's dreams, including my own. And I was pretty gutted when I found out about that, that it just wasn't something I was able to afford at the time. Like I've always wanted that.
SPEAKER_01:A cow.
SPEAKER_00:No, I think that's the missus, but she wants goats. So I'm like, no, no, no, no, no, no goats. I can do do with a cow, I can do with a horse, no goats. But yeah, it's always something I wanted. I want I really I like the the characteristics and the style of old farmhouses, little bit of land, you know, a little six acres, kids grow up on there, ride your dirt bikes around, all that kind of jazz. But it's just not in the cards for me just yet. Definitely working towards it, but I still manage to buy rurally, which is nice. It's just only a fairs and square meters.
SPEAKER_01:You're welcome.
SPEAKER_00:Thank you. Thank you very much. Thank you very much.
SPEAKER_01:But you're right, you know, the the lifestyle could be a bit trickier for the banks. Then we're gonna jump into apartments just quickly.
SPEAKER_00:Apartments, yeah.
SPEAKER_01:So what do you think, dear?
SPEAKER_00:So it it really depends. Um, like I like apartments and stuff, but there's there's a few rules around it as well. Like, especially if your first home buyer and you're coming in with a 5% deposit through Kayanura, they the apartment has to be a minimum size. Like each bank has a little bit of a different amount, but it's usually around about 45 meters squared, including the balcony. I know the balcony is. I'm like, it's a bit weird. Like, I'm like, how big is these guys' balconies gonna be? But like, okay. Um square meter. Yeah, I think that was the the highest of the low scale of of most of the banks, you know. But like, and there's also so Kyangarore will only allow for a certain percentage of those flats as well to be owned by the like those kind of clients, like the you know, I can't remember what it was specifically off the top of my head.
SPEAKER_01:But definitely a tricky situation, and it's case by case, yeah. So case by case, and it's also affordability comes into an issue here because apartments would normally come with body corp.
SPEAKER_00:Yep.
SPEAKER_01:And if there is any future maintenance, so you've got to watch out with apartments, there might be future maintenance that's noted down in the minutes of the body corp.
SPEAKER_00:That's another one to look at as a type of property as well.
SPEAKER_01:Again, yeah, you really have to be on top of it, eh? You really have to.
SPEAKER_00:So it doesn't need it doesn't even have to be specifically apartment, it's uh or body corp, it can be listed as uh a commercial one, which they don't like either.
SPEAKER_01:Company shares, definitely a no-go. So you think about company shares, so definitely a no-go. Commercial property is definitely not a go for first-time buyers. I had mine first-time buyer, I wanted to buy a commercial property and live there as well. So sorry.
SPEAKER_00:We don't like that.
SPEAKER_01:Awesome. Well, Jordan, thank you so much. Any parting thoughts?
SPEAKER_00:No, just I mean, you can ask like I think always if you find a property you like, yeah. I mean, if you can send it through to your advisor what they think first as well.
SPEAKER_01:Yeah, and we can quickly let you know. And the other thing as well is those monolithic type properties. So if you are, uh I hear this a lot. I've got a lot of clients that are self-employed, they're at tredies, and they come to me with a monolithic type cladding, and they go, This is a jam, I could buy it for 300k less because I can reclad it myself, and you know, this property is gonna be worth over one million. Yeah, no, the bank is not gonna like it. Because remember, the bank always takes the purchase price over any other value. So if you're buying it at 300k less, they will automatically apply that price as the value of the property. So therefore, you are devaluing the property straight away.
SPEAKER_00:And if if there's issues, like the bank doesn't like issues.
SPEAKER_01:Correct. That's awesome. Well, guys, thank you so much for listening in. As usual, if you've got any questions or any topics you wish us to cover, would love to do this for you. Jordan, thank you so much for popping in. Until next time.
