Most young Kiwi still plan to buy, many with small deposits
Almost half of young New Zealand homeowners bought with a deposit of 15% or less, and the next wave of buyers is aiming for much the same, according to new research from Trade Me Property.
The survey of 501 New Zealanders aged 20 to 30, carried out by The Research Agency (TRA), found the appetite for ownership remains strong. Some 82% intend to buy, while 11% have given up on the idea. Among those yet to purchase, 77% are confident they will get there.
Small deposits, big reliance on KiwiSaver
KiwiSaver is central to most plans. It was used by 61% of current owners, and 79% of future buyers expect to draw on it.
That reliance is already showing up in the numbers. First-home buyers withdrew a record $2.2 billion from KiwiSaver in the year to March, up 25% on the year before, according to the Financial Markets Authority.
Many buyers are getting in with modest deposits: 49% of owners put down 15% or less, and 53% of aspiring buyers are targeting a similar level. A quarter of owners used a Kāinga Ora First Home Loan, and 31% of future buyers are considering one. Rent-to-buy has attracted the sharpest rise in interest, from 15% of owners to 27% of prospective buyers.
Trade Me Property customer director Gavin Lloyd (pictured) said most respondents appeared to grasp the trade-offs involved.
“Seventy-one per cent told us they understood the risks that come with a low deposit, but just over a quarter weren’t sure,” Lloyd said.
Ready to compromise
Young buyers are prepared to bend to get a foot in the door. Some 35% would consider shared ownership, 33% would settle for a smaller home, and 30% would take on a renovation, with just 4% unwilling to compromise at all.
“They’re not fixed on one path to get there,” Lloyd said.
Fewer have a firm date in mind. While 42% expect to purchase within five years, the most common single answer, at 28%, was someday but unsure when.
Even so, some are already making their move. Independent economist Tony Alexander’s latest NZHL Property Report found a net 45% of agents were seeing more first-home buyers, the strongest reading since late February, while a net 46% reported fewer investors.
Owning still wins hearts
Ownership remains strongly linked to freedom and stability, while 40% saw renting as the more practical option, compared with 29% for owning.
“Renting is seen as the practical choice, but owning is where the emotion lives,” Lloyd said.
Respondents were less hopeful about those following them. Only 54% believe the next generation will manage to buy, 23 points below their confidence in their own prospects.
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