By the numbers: First home buyers
First home buyers continue to dominate the housing market, despite challenging economic times, a property researcher says.
The market has been quiet over the first quarter of this year, and the latest Real Estate Institute figures showed that sales activity remained subdued in March.
Despite the new Government’s introduction of more investor-friendly tax policies, the consensus among commentators is that high mortgage rates are holding buyers back.
But CoreLogic has released its latest buyer classification data, and it showed that first home buyers’ share of purchases continued to hover at record levels.
Here’s what the numbers tell us about how first home buyers are faring in the current market.
25.6%
The share of property purchases made by first home buyers around New Zealand in March.
CoreLogic chief property economist Kelvin Davidson said that despite fewer working days due to Easter, the numbers of sales were “pretty solid, too”. Sales were up by 8% from March last year, and also slightly higher than March 2022, although there were fewer sale than in March 2021, when the market was running hot, he said.
6521
The number of sales nationwide in March. It was up from 6040 at the same time last year, according to the Real Estate Institute’s data.
27%
That’s the record quarterly high for first home buyers’ market share, which CoreLogic recorded over the July to September months last year.
While the March figure did not hit that high, it continued first home buyers’ solid run of activity, Davidson said. Their market share was at 25% or more for the past year, and at 26% over the first quarter of this year.
36%
That was Wellington first home buyers’ share of the market, and it was the highest of the main centres.
But their market share was also above the national average in Hamilton at 34%, and in Auckland and Christchurch at 28% respectively. In Dunedin, their market share was 26%, while in Tauranga it was 22% – although compared to the city’s past norms, that was quite strong, Davidson said.
21.8%
The long-term average for first home buyers’ market share, based on records going back to 2005.
Davidson said it was never easy for first home buyers, but there was a long list of reasons they had been enjoying a stronger than average presence in the market.
These included access to KiwiSaver for part of the deposit, making use of the low deposit lending allowances at the banks, targeting new builds, and reduced activity from other buyer groups.
21% and 26%
In contrast, mortgaged investors and “movers”, or existing homeowners moving, saw their share of the market down to 21% and 26% respectively.
For mortgaged investors, that share is down from a record peak of 29% in the first quarter of 2021, but up from a record low of 19.9% in April last year.
There were challenges holding back mortgaged investors, Davidson said.
These included low rental yields, high mortgage rates, tough deposit requirements, and the phased removal of mortgage interest deductions.
“Movers” market share had been sitting at 26% for about two years, and was below a more normal figure of about 28%, he said.
16%
Davidson said that while conditions looked relatively favourable for first home buyers over the coming months, with loanto-value ratios due to ease and more listings, another data set suggested that this group might be pulling back.
In economist Tony Alexander’s latest survey of mortgage advisers, a net 16% reported that they were seeing more first home buyers in the market.
But this was down from 24% last month, and the weakest result since -13% in January 2023, Alexander said.
“The result gels with measures in my other surveys showing that people are responding to their worsening expectations for the economy, and new fears about income and employment, by pulling back from earlier plans to purchase a property.”