First-home buyers as much of the market as investors: CoreLogic

Wednesday, 17 October 2018

First-home buyers are 24 per cent of the market.

First-home buyers are buying as many properties as investors with a mortgage, new data shows.

CoreLogic has released statistics for the third quarter of 2018, which show that the two buyer groups are responsible for the same proportion of sales for the first time.

Owners of multiple properties, buying with a mortgage, are now 24 per cent of buyers, from 22 per cent earlier in the year.

That is still less than the 28 per cent they made up before new loan-to-value restrictions forced banks to only lend to investors with 40 per cent equity in the deal (since downgraded to 35 per cent).

In Christchurch, first-time buyers are 30 per cent of the market.

* Wellington homes sell for record high, outpace NZ spring property fling**

First-home buyers are also 24 per cent of the market. Their percentage has been rising steadily since 2014.

It is now at the same level as it was before the global financial crisis.

CoreLogic said it was the first time the two buyer groups had been even.

Researcher Kelvin Davidson said KiwiSaver was a significant driver. Typical first-home buyer purchases had about $40,000 of KiwiSaver money attached to them. 'That's a decent chunk of money that other buyers don't have.'

First-home buyers were also more willing to compromise on location or quality of the home they were buying to get into the market, he said. 'There's also a financial incentive, provided people can get the deposit together renting can be more expensive than paying a mortgage.'

Are you a first-home buyer and willing to share your story? Email susan.edmunds@stuff.co.nz

He said the trend was likely to continue. 'This is percentage of the market not the number of sales. They are holding on better [in a slowing market] than other groups rather than striding back into the market. I'd expect that percentage to keep growing.'

Key markets for first-home buyers are Christchurch and Wellington.

In Christchurch, first-time buyers are 30 per cent of the market.

People moving from one home to another have a lower share than they would historically.

At 27 per cent, their market share is the lowest it has been since 2011. 'The high cost to trade up, both in terms of the higher price for a newer/larger house as well as legal/moving expenses, will be a key factor keeping existing owners where they are. We also know from high levels of building consents for renovation that owners are altering rather than moving.'