First Home Buyers Maintain Strong Presence in New Zealand Property Market

First home buyers (FHBs) have maintained a record 26% share of the New Zealand property market in March 2023, according to the latest CoreLogic report. This strong presence was particularly notable in major cities like Wellington (36%), Hamilton (34%), Auckland (28%), and Christchurch (28%).

The report attributes the success of FHBs to factors such as the effective use of KiwiSaver for deposits and low deposit lending allowances at banks, especially for new builds. "First home buyers maintained a record 26% share of the New Zealand property market in March 2023, dominating in Wellington (36%), Hamilton (34%), Auckland (28%), and Christchurch (28%)," states the CoreLogic report.

While FHBs continue to flourish, other groups like movers and mortgaged investors face ongoing challenges. Movers had a 26% market share, below the normal 28%, likely due to the high cost of 'trading up' and limited choice of available listings. Mortgaged multiple property owners (investors) had a 21% share, facing challenges like low rental yields, high mortgage rates, and the phased removal of mortgage interest deductions.

Looking ahead, the report suggests that the increased stock of available listings and easing of loan-to-value ratios (LVRs) could lead to increased activity from movers and investors, respectively. However, the report remains optimistic about the prospects for FHBs, as more low-deposit financing options become available and the market sees an increase in listings, potentially enhancing their bargaining power and choice.

CoreLogic's Buyer Classification data provides valuable insights into the dynamics of the New Zealand property market, helping policymakers, industry professionals, and potential buyers make informed decisions. As the market continues to evolve, the performance of first home buyers will remain a key indicator to watch.

Key Takeaways

• FHBs maintained 26% share of NZ property market in March 2023.
• FHB dominance was highest in Wellington (36%), Hamilton (34%), Auckland (28%), Christchurch (28%).
• Movers (26%) and mortgaged investors (21%) faced challenges due to high costs and low yields.
• Increased listings and eased LVRs may boost activity for movers and investors.
• FHB success highlights resilience and effectiveness of government policies supporting home ownership.