More value for first-time buyers
The latest biannual First Home Buyer Report from CoreLogic revealed that first-home buyers (FHBs) accounted for 26% of all property purchases in the first quarter of 2024 in New Zealand, significantly above the long-term average of 21%.
The surge is attributed to lower property prices, increased availability of low-deposit finance options, easier access to KiwiSaver funds, and reduced competition from other buyers.
Market dynamics favouring buyers
Kelvin Davidson (pictured above), NZ chief property economist at CoreLogic, explained the recent market shifts that have benefited FHBs.
“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,” Davidson said, highlighting the resilience and continuous strong presence of FHBs even amid these fluctuations.
FHBs getting more for less
FHBs are finding better deals, with the median price for first homes dropping to $695,000 in Q1 2024, down from $699,000 last year and $715,500 in 2022.
“That’s despite standalone houses, bigger properties, representing a higher share of FHB purchases this year, which essentially signals that FHBs are getting ‘good deals’ in the current conditions,” Davidson said.
He also pointed out that while FHB prices are lower than the broader market average, they are still above the lowest quartile, indicating that many FHBs are not merely settling for the cheapest available options.
Regional trends and outlook
The national trend of increased FHB activity is mirrored across major urban centres such as Auckland, Hamilton, Tauranga, wider Wellington, Christchurch, and Dunedin, with all recording FHB activity above long-term averages. This trend extends to other key centres like Rotorua and Invercargill, where FHBs have significantly increased their market presence.
Davidson remains optimistic about the continuation of this trend.
“It’s never easy to buy that first property, but FHBs have remained consistently active since late 2022 and many of the key factors that prompted them to act then remain in place today,” he said.
Davidson also cautioned that the landscape may evolve with upcoming changes in legislation affecting interest deductions, CCCFA and LVR rules, and adjustments to the Brightline Test.
Here’s where to download the CoreLogic report: www.corelogic.co.nz/news-research.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
