FHBs hold strong market share
First-home buyers (FHBs) are making the most of a favorable property market, comprising 27% of recent purchases – significantly higher than the 21% long-term average, according to the latest CoreLogic First Home Buyer Report.
The report provides a comprehensive look at FHB trends across New Zealand, including property types and prices paid.
Strategies helping FHBs enter the market
CoreLogic NZ chief property economist Kelvin Davidson (pictured above) noted that FHBs are using various approaches to secure homes despite housing affordability challenges.
“It’s never easy to get that first home and stretched housing affordability - despite falling mortgage rates – remains a key challenge,” Davidson said.
Davidson highlighted that many are utilizing low-deposit lending limits, accessing KiwiSaver funds for deposits, and compromising on location and property type to make ownership a reality.
Market conditions offer “good deals” for FHBs
The data showed a decrease in the median price paid by FHBs, from $715,000 in 2022 to $685,000 in 2024, despite an increase in standalone houses (73% of purchases).
Davidson said, “This signals that FHBs are getting ‘good deals’ in the current conditions,” with house prices down and numerous listings favoring buyers.
Housing affordability constraints shaping FHB choices
As housing affordability has become more restrictive, FHBs are adapting by shifting toward different property types.
“If you go back to 2019 and 2020, standalone houses accounted for more than 75% of FHBs’ purchases,” Davidson said, indicating that FHBs are adjusting their preferences in response to market constraints.
Read more: Is housing affordability still an issue in New Zealand?
Regional trends show widespread FHB activity
Across New Zealand, FHBs are active in nearly every region. In the first nine months of 2024, Wellington led major centers with FHBs accounting for nearly 35% of purchases, while Tauranga had the lowest share at 23%.
When compared to historical averages, FHB activity remains elevated in cities like Hamilton and Tauranga (7% above average) and in other areas like Auckland, Christchurch, and Dunedin.
Outlook for first-home buyers remains promising
Looking ahead, Davidson anticipates a favorable environment for FHBs, though competition from investors may increase in the next year.
Lower interest rates are likely to support continued FHB activity, and banks’ allowance for lending outside debt-to-income ratio limits could provide additional help, especially in pricier areas.
“All signs point to FHBs continuing to hold onto an above-average share of property purchases in the next six to nine months,” Davidson said.
For more information, see CoreLogic’s report.
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