FHBs made 3,260 purchases in the first quarter
First-home buyers have continued to record high market share over the past two quarters, despite continued affordability pressures, tight lending rules, and higher mortgage rates.
According to CoreLogic’s latest First Home Buyer report, FHBs made 3,260 purchases in the first quarter, the lowest for that quarter of the year since 2011. However, FHB held around 25% of the market, on par with previous record highs and well above the long-term average of 21-22%.
Kelvin Davidson (pictured above), CoreLogic NZ chief property economist, said FHBs have made the most of weaker conditions that have been impacting all buyer groups, thus, their relatively strong performance.
“There are many potential reasons for the relative strength of FHBs, but key ones are likely to include using KiwiSaver for all or part of their deposit, a willingness to compromise on the type and/or location of a property, and making use of the low deposit lending quotas at the banks,” Davidson said.
“The wider downturn in values and relatively high stock of listings on the market has also helped finance-approved FHBs and brought a wider range of properties back onto their radar.”
Across the main centres, all six areas registered higher than average market share for FHBs, with Hamilton being the strongest, with an FHB market share of 33% in Q1 2023, about nine percentage points higher than its average.
In the first quarter, 75% of FHB purchases nationally were for standalone houses, up 4% from a year ago and well above the share of this property type across all buyers (72%). On the flipside, the share of apartments amongst all FHB purchases fell to 18%, from 21% a year ago.
Despite purchasing larger or more freestanding homes, the median price paid by FHBs fell in Q1 to $680,000, from $730,000 the prior year. The figure was significantly higher than the lower quartile across all buyers of $555,000.
“Given the higher proportion of houses within all FHB purchases recently, the recent drop in the price being paid isn’t due to them simply buying smaller or cheaper properties,” Davidson said.
All main centres have also seen the median price being paid by FHBs decline in recent months and quarters, alongside the wider fall in property values. Auckland posted the highest FHB median in Q1, at $885,000, down from $1 million a year ago).
Amongst the main urban areas, the relative strength for FHBs’ market share remained in place in the first quarter, with houses accounting for a high share of FHB purchases. In terms of median prices, the highest paid by FHBs in Q1 was $875,000 in Queenstown, CoreLogic reported.
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