First home buyers [FHBs] now have more than just a foot on the property ladder, with new figures showing they have snapped up a record share of property purchases – a whopping 27 per cent in the third quarter of this year.
Data released by CoreLogic NZ indicates residential sales – including transactions through estate agents and private deals – have enjoyed five months of continuous growth, with September’s figure up eight per cent on a year ago.
CoreLogic NZ chief property economist Kelvin Davidson said there’s been an increase in FHBs’ presence in the market due to a combination of lower house prices, less competition from other buyer groups, and support from financing incentives such as Loan to Value Ratio [LVR] low-deposit allowances.
However, Davidson said this may take a slight turn following the change of government.
Additionally, relocating owner-occupiers and mortgaged multiple property owners [MPOs] had been relatively lower than usual, respectively accounting for 26 per cent and 21 per cent of purchases over the third quarter of 2023.
“We may see activity emerge from movers and MPOs as ‘property friendly’ policies are slowly introduced after a change in government, but we’re not convinced it will radically transform the subdued recovery that has commenced,” Davidson said.
Meanwhile, Inland Revenue has noted that 2880 people withdrew their savings from their KiwiSaver for the purpose of a first home purchase during September 2023, compared to 2260 people in September 2022.
Residential and lifestyle sales agent for Bayleys Wairarapa Dani Carrig said she has noticed an increase in FHBs throughout the region actively looking in the market this year and securing their first home.
“When indications show the market to be at the bottom and interest rates to be at their height, there comes a feeling of confidence for new buyers,” Carrig said.
“They feel that if they can manage the mortgage for a few years at this rate, things will eventually pick up and turn around with lower interest rates, higher market value, and equity gained in their property – as previous experience in the real estate market has always shown.”
According to Carrig, agents saw FHBs hitting the market during the boom of 2020 and 2021. However, she said it was harder to secure property during this time due to competitive situations and “people’s fear of missing out guiding them on price”.
“This year, it has been great to see and work with FHBs who have a lot more confidence stepping into the market.”
During 2022, Carrig said, the fear of missing out also turned into a fear of paying too much, whereas the 2023 FHBs process has been slower due to the option to view properties multiple times, seek any further advice they require, and take more time when making their final decision.
Carrig noticed that although there have been FHBs looking in every district in Wairarapa, she has personally dealt with most FHBs in Masterton – where the median house price has consistently been the lowest for some time, she said.
“While we’ve seen many FHBs back in the market searching for entry-level property, there has been less stock to choose from, which in turn creates further competitive situations at deadlines for properties that are perceived to be of great value,” Carrig said.
“Multi-offer scenarios are certainly becoming more common again.”