In each of New Zealand’s ten largest cities, the share of purchases at suburbs going to first home buyers has been more than 50% so far in 2019.
This is the finding of the latest CoreLogic’s Buyer Classification report, which found that these tend to be cheaper suburbs such as Hei Hei in Christchurch and Stokes Valley in Lower Hutt.
According to CoreLogic senior property economist Kelvin Davidson, the data shows that first home buyers and mortgaged multiple property owners (investors) remain neck and neck in terms of market share – with the former leaving a stronger presence. Meanwhile, existing owner occupiers, who are relocating (movers) are a little less active than normal.
The May figures suggests the suburbs with the strongest share of purchases going to first home buyers include Hei Hei, Stokes Valley, Titahi Bay, Bayview, Nawton, Bellevue, Green Island, Johnsonville, Milson and Onekawa.
Davidson said specific reasons for these patterns would be a clear willingness to look outside Wellington but still use decent public transport links to work in the city and earn higher wages, as well as better affordability.
The report also shows that first home buyers in all of these suburbs have been paying less than the overall average value for the relevant city as a whole.
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“Overall, these figures highlight how the strength of FHBs is pretty broad-based across the country and within our towns and cities,” he said. “For the rest of the year and in 2020, however, the overall market is set to remain fairly flat.
“The LVR rules and banks’ serviceability testing are restraining factors here.”
Davidson believes first home buyers need to win the market share battle to enjoy a higher number of purchases and also their banks to write more new mortgages. In their favour are access to KiwiSaver for a deposit and the Welcome Home Loan scheme, he added.