First-home buyers dominate share of new mortgages

by Roxanne Libatique29 Jul 2020

First-home buyers have taken out a larger chunk of new mortgages than property investors in June for the very first time, according to latest data from the Reserve Bank of New Zealand (RBNZ).

The RBNZ's latest data showed that first-home buyers and property investors have been busy climbing the property ladder after the COVID-19 lockdown, with the former rising on top. First-home buyers accounted for over 20% of new mortgages compared to only 19% for investors.

Wellington-based agency Tommy's Real Estate had seen homes receiving multiple offers, with many people seeking to buy their first home.

“Instead of getting three or four offers on a place, as we were in March, we're getting seven to 10 on properties at the moment. It's encouraging and promising, but I don't know how long it will last,” said Tommy's Real Estate sales consultant Nicki Cruickshank, as reported by RNZ.

Read more: Government launches scheme promoting homeownership

Kelvin Davidson, a senior property economist at CoreLogic, said the number of house sales has continued to rise since the lockdown ended a few months ago. However, figures might still change in the next few months.

“The big thing we're wary of is what will happen on the first of September when the wage subsidy ends. Even if things do look okay to people now, and do look normal, we've got to remember there are risks out there and the end of the year could be looking weaker,” Davidson told RNZ.

“Our prediction is house prices may be down 5%. So this window of buying opportunity may be shorter and shallower than it has been in the past.”

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