Conditions favour first home buyers

Property market conditions are set to favour first home buyers for the forseeable future, according to the latest report from CoreLogic.

The research firm’s report says first home buyers have held their record market share, with close to 26 per cent of property purchases in March, equal to owner-occupiers looking to move on.

Chief property economist Kelvin Davidson said their relative dominance was helped by several factors. “The most important are access to KiwiSaver for at least part of the deposit, making full use of the low deposit lending allowances at the banks . . . and of course relatively reduced activity from other buyer groups.”

First home buyers were strong in major city markets, taking 36 per cent of Wellington sales, 34 per cent in Hamilton and 28 per cent in both Auckland and Christchurch.

Davidson said owner-occupiers looking to trade up were being held back by higher costs, including legal and removal fees, as well as a lack of choice in the type of properties they were wanting. Investors were also being stymied by difficulties in getting bank finance, low rent yields, and — until recently — restrictive tax rules.

Davidson said banks had shown they were flexible in helping borrowers through tough times.