Strong market share for first-home buyers

First-home buyers (FHBs) continued to maintain a strong presence in the property market, holding record levels of market share, CoreLogic reported.

“It’s clearly never easy being a FHB, but conditions look set to stay relatively favourable for this group in the coming months,” said Kelvin Davidson (pictured above), chief property economist at CoreLogic NZ.

According to the latest CoreLogic Buyer Classification data, FHBs accounted for a 25.6% share of property purchases across New Zealand in March.

Regional performance and strategies

Significant regional variations highlighted the resilience and strategic buying of FHBs. In major cities like Wellington and Hamilton, FHBs exceeded the national average with market shares of 36% and 34%, respectively.

Davidson attributed this success to several factors, including the effective use of KiwiSaver for deposits and low deposit lending allowances at banks, particularly for new builds.

Comparisons with other buyer groups

While FHBs flourish, movers and mortgaged investors face ongoing challenges. The share for movers has stabilised at around 26%, slightly below the typical 28%, due to high costs associated with moving.

Mortgaged multiple property owners, including investors, have a quieter presence with a 21% share in March, influenced by low rental yields and stringent mortgage conditions.

Outlook for housing market dynamics

Looking ahead, Davidson sees potential shifts in the market dynamics.

“Now that the stock of available listings on the market has risen, this could grease the wheels a bit for movers, and see their share of purchases rise a bit in the coming months,” he said.

Additionally, with an easing of LVRs and more favourable conditions for investors, there could be increased activity from these groups.

_{Source: CoreLogic}

Opportunities and challenges for FHBs

Despite prevailing affordability issues, Davidson remains optimistic about the prospects for FHBs, particularly as more low-deposit financing options become available and the market sees an increase in listings. This environment could enhance the bargaining power and choice available to finance-approved FHBs, continuing to support their strong participation in the market.

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