First buyer median price about $800k
More new buyers also coming through despite challenges, say experts
Tauranga first-home buyers are paying a median price of just above $800,000 to get onto the property ladder, new data shows.
Some property experts say higher prices for property in the city meant Tauranga was not an active market for first-home buyers who were finding it tricky to save up a deposit and service a mortgage.
But they were noticing more new buyers coming through despite continued affordability pressures, tight lending rules, and higher mortgage rates and prices.
Corelogic’s biannual First Home Buyer report, released last week, showed 3750 first-time purchases in
New Zealand were made in the three months to September. It was the lowest figure for that quarter of the year since 2011.
In Tauranga, 118 first-home buyer purchases were completed during the same period. That was slightly more than 115 in the previous quarter but down on the long term average of 215.
First-home buyers in Tauranga paid a median of just above $800,000 in Q3.
Real Estate Institute of New Zealand data released this week showed Tauranga’s median house price dropped $55,000 in the last month to $900,000. Rotorua’s dropped 0.1 per cent to $659,500.
Corelogic’s head of research Nick Goodall said first-home buyer purchases made up 15 per cent of sales in Q3 in Tauranga, which showed it was not an active market for people seeking a foot on the property ladder compared to nationwide figures.
“This is also low for the area ... no doubt the higher average price in Tauranga plays a part here, making it harder for first home buyers to both save for the required deposit and service a mortgage at current rates.”
Corelogic’s chief property economist Kelvin Davidson said continued affordability pressures, tight lending rules, and higher mortgage rates were a factor.
However, there was some confidence re-emerging among firsthome buyers, he said .
“We suspect some of these recent buyers had previously held back as prices fell, but have now started to see value again – maybe even some genuine bargains – and are prepared to make a purchase even if house prices haven’t fully found the floor just yet.”
But Davidson said that with inflation, an expected rise of the official cash rate (OCR), and home loan interest rates rising again, typical mortgage rates were likely to climb and would be a “stern test” for many wouldbe first home buyers.
"Salespeople say there are opportunities for first-home buyers not available previously, and when finance is confirmed, they are acting on it." REINZ regional director Neville Falconer
Managing director of the Realty Group, which operates Eves and Bayleys, Heath Young said sales volumes were down compared to long-term averages across all buyer categories.
“The higher interest rates and credit criteria are certainly having an impact on first-home buyers, however, from a positive perspective, buyers are seeing more favourable prices than a year ago, have longer to make decisions, and certainly have more properties to choose from.”
Young said first-home buyer activity in Tauranga and Rotorua in the last few months was
“solid” with good deals achieved as the market re-rated.
“Activity has certainly picked up through July–september when compared to the period April to June.”
REINZ regional director Neville Falconer said first-home buyers and owner-occupiers
were active in Tauranga and Rotorua. “Rotorua salespeople also reported adequate interest from developers beginning to filter through.
“In Tauranga, salespeople say there are opportunities for firsthome buyers not available previously, and when finance is
confirmed, they are acting on it.”
Falconer said there was more higher-end stock but, again, lower buyer demand.
“Newly listed properties with quality marketing campaigns attracted higher than average open home attendance this month.”