First-time buyers change buying habits

The percentage of first-home buyers in the market has dropped in most places around the country since the rules came into effect in October.

Auckland City is one of the only main centres that hasn’t reported a drop. There are now 1% more first-time buyers in the market there than there were before the rules, compared to 2.6% fewer on the North Shore, 0.5% fewer out west and 2.1% fewer in Manukau.

Queenstown, Tauranga, Hamilton, Rotorua and Napier have had the largest drop in first-home buyers. Rotorua had the biggest percentage decrease, with the percentage of first-timers in the market down 5.1% compared to before the rules came in.

In Wellington, the proportion of first-home buyers in the market has dropped 2.1%.  Upper Hutt's increase in first-home buyers has continued and Porirua's previous slight increase has now turned into a slight decrease.  Palmerston North is another area where the increase in first-home buyers continued, up 2.9%, CoreLogic said

In Auckland, suburbs with a significant increase in first-home buyer participation have increased in value by more than suburbs with a significant decrease in first-home buyers.

New Lynn’s prices are up 19.6%, Weymouth’s 16.6%, Chatswood’s 14.9% and Cockle Bay’s up 9.2%. All of those suburbs now have a higher proportion of first-time buyers.

CoreLogic said some very expensive suburbs had an increase in percentage of first-home buyers, such as Mission Bay, Glendowie, Fairview Heights,primarily at the lower end of the price range.

In Auckland City, where the overall percentage of first-home buyers has increased, there was a decline in properties purchased which were valued between $400,000 and $500,000.  But first-home buyers were buying more properties under $400,000.

Properties valued at more than $700,000 have become less popular with first-home buyers, but there has been an increase in first-home buyers within the $500,000-$600,000 value range, suggesting those high-end first-home buyers have also adjusted their value expectations down.

“So, it would seem there is no simple answer at this stage.  However the change in percentage of first-home buyers within suburbs of the Auckland region suggests some first-home buyers are willing to modify their behaviour in order to get on the property ladder,” the CoreLogic report said.