First home buyers (FHB) and mortgaged multiple property owners have been equally active in New Zealand’s housing market in the first quarter of 2019, according to analytics firm CoreLogic.
In its latest Q1 data for buyer classification report, CoreLogic revealed both buyer groups accounted for roughly 24% of property purchases respectively – although mortgaged multiple property owners are slightly ahead of first home buyers at 23.9% versus 23.7%.
CoreLogic senior property economist Kelvin Davidson said mortgaged multiple property owners have slowly crept back into the market on the back of more finance becoming available again. He also noted the comeback happened despite several new rules from the government which have raised costs, including extra insulation and changes to negative gearing.
Davidson cited the ability of first home buyers to tap into their KiwiSaver funds for a deposit and their willingness to compromise on location/property type as key factors that keep their share of purchases high.
“CoreLogic figures show that as part of that compromise, FHBs are entering many markets around the country at prices 15-20% lower than the area’s average,” he said.
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Meanwhile, existing owner-occupiers (movers) were found less active than in the past. Over the first three months of the year, movers accounted for 27% of property purchases, down from 28% a year ago and from 29% in the first quarter of 2017.
“With the next step up the property-buying ladder still hard to achieve – e.g. due to the transactions costs (legal, estate agent), as well as any extra equity/debt required – it’s not really surprising that more movers are happy to stay put, and perhaps renovate instead,” Davidson said.
Despite average values being over $1 million in Auckland, first home buyers make up the largest individual buyer group with a 27% share. In Wellington, mortgaged investors’ share of purchases has risen back above first home buyers at 30%. For those priced out of Wellington City, purchasing in the Hutt Valley is an option as the report shows first home buyers have a very strong market share in Lower Hutt as well as in Upper Hutt and Porirua.