Source: CoreLogic
The country’s first home buyers (FHBs) are taking full advantage of lower property prices, the availability of low-deposit finance, opportunities to tap into KiwiSaver funds, and reduced competition from other buyers.
CoreLogic’s biannual First Home Buyer Report released today shows FHBs accounted for 26% of purchases in Q1 of 2024, well above the long-term average of 21%.
The report, based on the CoreLogic Buyer Classification series, provides in-depth insights into FHB activity across New Zealand, the types of properties being purchased and prices they’re paying.
NZ Chief Property Economist Kelvin Davidson said since the previous edition of the First Home Buyer Report was published in November 2023 there have been two ‘mini-phases’ in the housing market recovery.
“There was a small burst of price growth at the tail end of 2023, but more listings became available over the first few months of 2024, which has contributed to a slowdown in property values, as conditions swing back in favour of buyers,” he said.
“Throughout all of these market changes, one constant factor in recent months has been the continued strong presence of first home buyers.”
As FHBs navigate tricky lending conditions and high mortgage rates, Mr Davidson said they were taking advantage of the low-deposit lending allowances at the banks, using FHB grants and loans, and in some cases compromising on location and/or property type.
FHB median price – more bang for buck
FHBs are paying less for more in 2024, with the median price falling to $695,000 in Q1 2024 from $699,000 last year, and $715,500 in 2022.
That’s despite standalone houses, bigger properties, representing a higher share of FHB purchases this year, which essentially signals that FHBs are getting ‘good deals’ in the current conditions,” Mr Davidson said.
He also pointed out the median FHB price might be lower than the market more broadly, however they’re often not buying the cheapest properties.
“The price being paid by FHBs is significantly higher than the lower quartile, or bottom 25%, of all buyers, where the median price is $565,000,” Mr Davidson said.
“It shows that the ‘typical’ FHB doesn’t always enter at the bottom of the market and work their way up. Many actually enter the market well above the ‘bottom rung’ of the ladder.”
