With investors set to benefit from a change of government following this month’s election, it seems that, for now, first home buyers (FHBs) will continue to play a dominant market role.

According to the latest data from CoreLogic, first-time buyers accounted for an impressive record-high of nearly 28% of property acquisitions in September. The data also showed that residential sales numbers (via estate agents and private transactions) have increased for five consecutive months, with September’s numbers showing an 8% increase compared to the previous year.

First home buyers continue to hold a significant presence in various key urban centres, with both Auckland and Christchurch markets each around 29% of total property purchases.

According to Kelvin Davidson, Chief Property Economist at CoreLogic NZ, this robust first home buyer presence can be attributed to a combination of factors including lower house prices, reduced competition from other buyer groups like relocating owner-occupiers, and support from financial incentives such as LVR low-deposit allowances.

On the supply side, CoreLogic reports that national average property values hit their lowest point in September after approximately 18 months of declines primarily driven by reduced listings. New property listings for the four weeks ending on 8 October 2023 amounted to 7,316, representing a decline of approximately 15% compared to the same period the previous year and the five-year average. Nonetheless, they are on the rise with the advent of spring.

Keith Niederer, General Manager NZ, Raine & Horne, expressed his perspective: “For first home buyers looking to take that initial step onto the property ladder, there may never be a better time than now. 

“I’d also urge the new government to maintain the current first home buyer benefits, as the evidence suggests that more young people are entering the New Zealand property market, which is beneficial for the real estate sector and the broader economy.”

CoreLogic October Housing Chart Pack highlights:

• Residential real estate is worth $1.58 trillion
• The flat national property value in September reflects continued falls in some areas offset by modest growth in values elsewhere, such as in Auckland and Wellington.
• The number of property sales in September rose 8% higher than a year ago, the fifth consecutive monthly increase.
• There were 7,316 new listings over the four weeks ending 8 October, down from 8,597 the same period last year.
• Total stock on the market is 31,242, around 15% below this time last year.
• First home buyers’ market share of almost 28% remains strong, with both Auckland and Christchurch at 29% respectively.
• Nationally rental growth hit more than 7% in September, reflecting higher wages, but also a tightening supply and demand balance, as migration soars in NZ.
• Gross rental yields nationally have edged back up to 3.2% (from a trough of 2.6% for much of 2022), the highest level since late 2020.
• Around 54% of NZ’s existing mortgages by value are currently fixed but are due to reprice onto a new (generally higher) mortgage rate over the next 12 months.
• Inflation seems to have passed its peak and the Reserve Bank will wait to see the effects of the 5.5% OCR for this tightening cycle. Mortgage rates are close to, or already at, their peak.

For all your real estate sales and property management needs this spring, contact your local Raine & Horne office.