Despite surging house prices and strong competition, first home buyers made up a record high portion of the market and property investors are busier than last year, CoreLogic says.
The share of purchases made by first home buyers (FHBs) rose to 25 per cent between June and September, the highest since CoreLogic began measuring buyer types 15 years ago.
“FHBs have obviously also benefited from low mortgage rates, while a willingness to switch from standalone dwellings to instead purchasing an apartment or townhouse has helped too,” said senior property economist Kelvin Davidson in a research note.
“But FHBs have also been tapping their KiwiSaver funds, with more than 44,300 withdrawals for first home purchase in the year to March 2020, up from about 39,600 the previous year.”
First home buyers made up a record high portion of the market in the last three months, says CoreLogic. –
Investors were also busy buying homes, making up 26 per cent of all purchases in the last three months. That was the highest figure since late 2016, just before a 40 per cent deposit requirement was introduced by the Reserve Bank, Davidson said.
The number of deals done by investors in the third quarter was up 20 per cent on a year earlier.
A fifth of Property Investors Federation members had indicated they would quit the rental market once the Residential Tenancies Amendment Act came into effect. The bill was passed in early August, but more real estate agentsreported seeing investors in October than a month earlier.
The Government passed the Residential Tenancies Amendment Act in August, which has banned rental bidding, limited rent rises to once a year, and ended no-cause evictions of tenants.
Lower interest rates and the temporary removal of loan-to-value restrictions in April, for a year, helped accelerate the increase which had been evident before the coronavirus pandemic hit, Davidson said.
“Overall, investors and [first home buyers] have continued to drive a lot of the recent momentum in property market activity, and this could remain the case over the next little while too.”
In contrast, existing homeowners who were moving remained relatively quiet, with the shortage of listings making it difficult for them to find the next property to move to, he said.
Residential property sales jumped by 37.1 per cent in September to a more than three-year high of 8377, the most for over three years, the Real Estate Institute of New Zealand (Reinz) said on Tuesday.
Three quarters of homes sold last month went for more than $500,000 for the first time on record, and the country’s median house price rose 14.7 per cent from a year earlier to a new record of $685,000.
The total number of properties available for sale in September fell by 17.0 per cent on a year earlier, to a record-low 17,576.