First home buyers pace setters: CoreLogic
Wednesday 17 October 2018
First home buyers accounted for nearly one in four residential property buyers in the September quarter, rivalling investors, according to new research.
The 24% slice of the market for FHBs compares to just 18% of the market four years ago, the research firm said. Christchurch and Wellington were said to be popular destinations.
CoreLogic research analyst Kelvin Davidson said: "At those levels,FHBs’ share of the market is on a par with the pre-GFC peaks*, while it’s also the first time that they have matched mortgaged multiple property owners."
Mortgaged multiple property owners also took a 24% share in the September quarter. CoreLogic said investors, remained resilient, despite measures introduced to curb spending, such as ongoing LVR restrictions requiring a 40% deposit.
Kelvin Davidson said: "Despite extra regulatory pressure (e.g. Healthy Homes; the looming removal of negative gearing; longer-term threat of a capital gains/income tax), these figures show that new investors are still entering the market and/or existing landlords are expanding their portfolios."
Davidson pondered whether FHBs would surpass multiple property owners this quarter: "It’ll be really interesting to see if FHBs can push ahead of mortgaged MPOs next quarter, driven by access to their KiwiSaver funds and also a clear financial incentive (often renting can be more expensive than a mortgage repayment, provided that the deposit hurdle can be cleared)."
According to the CoreLogic research, second movers -- home owners shifting house -- are taking a relatively low share of the market. "context. At 27%, their share is the lowest it’s been since early 2011. The high cost to trade up, both in terms of the higher price for a newer/larger house as well as legal/moving expenses, will be a key factor keeping existing owners where they are," Davidson said.
While cash multiple property owners have "flattened off" in recent months, CoreLogic said, perhaps due to the impact of the foreign buyer ban.
Davidson said competitive interest rates and banks gradually raising lending would boost the market in the months to come, adding "overall activity is unlikely to race away, so the story for the next few months at least will continue to be about the different buyer groups (and their lenders) jostling for market share".
Comments from our readers
No comments yet
Sign In / Register to add your comment
The cancellation of a capital gains tax combined with lower mortgage rates will be game changing for the housing market, believes Westpac’s chief economist.
Many investors are switching from residential to commercial property and now a new platform aims to makes access to the sector easier.
The latest Reserve Bank lending data reveals investors borrowed more than $1 billion in March, the highest figure since November, but a 10% fall on the same period last year.