First-home buyers (FHBs) are on a roll despite the COVID-19 pandemic as they take a record share of property purchases in the third quarter of the year, according to CoreLogic.
The CoreLogic Buyer Classification series revealed that either FHBs or mortgaged investors had taken more than half of property purchases in Q3 – with FHBs' share of 25% being their highest figure on record, surpassing the previous peak of 24% in 2006 to 2007.
FHBs have benefitted from low mortgage rates and their willingness to move from standalone homes to an apartment or townhouse. They have also been tapping their KiwiSaver funds – with over 44,300 withdrawals for first-home purchase in the year ended March 2020, up from around 39,600 in the previous year.
Meanwhile, mortgaged investors had a 26% share of purchases in the third quarter, the highest figure since 28% in Q3 2016.
“The rise in market share for mortgaged investors isn't just because they've ‘held on’ while other buyer groups have made fewer purchases – in fact, the number of deals done by mortgaged investors in the third quarter was more than 20% higher than a year ago,” CoreLogic said.
“Their activity levels were already rising pre-COVID, but this trend has just been reinforced in the past six months by reduced interest rates and the temporary removal of the LVR rules.”
In contrast, movers remained relatively quiet, with some unable to find the next property to purchase due to a shortage of listings.