Firsthome buyers more active

FIRSTHOME buyers are taking full advantage of lower property prices and less competition from other buyers, the latest data is indicating.

Firsthome buyers accounted for 26% of purchases in the first quarter of 2024, which was well above the longterm average of 21%, according to CoreLogic’s twiceyearly First Home Buyer Report.

CoreLogic’s chief property economist Kelvin Davidson said firsthome buyers were taking advantage of the lowdeposit lending allowances at banks, and firsthome buyers grants and loans.

Some were compromising on the location and type of property.

But he said fewer deals were settled in the first quarter, reflecting the overall downturn in the housing market.

‘‘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.

The median house price fell to $695,000 in Q1 2024, compared with $699,000 last year, and $715,500 in 2022.

‘‘The price being paid by FHBs [firsthome buyers] is significantly higher than the lower quartile, or bottom 25%, of all buyers, where the median price is $565,000,’’ Mr Davidson said.

Firsthome buyers did not always enter at the bottom of the market.

Mr Davidson said the increase in firsthome buyers also defied a significant gap between the cost of a mortgage and rents.

‘‘With rent being significantly cheaper it certainly highlights that most firsthome buyers are likely to be purchasing for reasons such as stability of tenure rather than due to simple financial drivers.’’

Mr Davidson said average FHB activity was expected to continue this year and possibly into 2025, particularly given other buyer groups, such as investors, were still facing challenges. — RNZ