The share of properties (and the total number) being sold to first-home buyers continues to increase, that's despite plenty of angst about their plight in the housing market amid rapid price inflation.
A new report from CoreLogic shows that the share of purchases being made by first-home buyers is at its highest since they began tracking it in 2005.
In the third quarter of 2020 25 percent of purchases went to first-home buyers. The previous peak of 23 percent came in 2006-7.
Better than bottom dollar
The report also reveals that many first-home buyers are not forced to buy in at the bottom rung of the property ladder.
The median price paid by first-home buyers in 2020 is $565,000, significantly above the lower quartile (bottom 25 percent) price of $430,000. That number is still below the median for all purchases of $619,000.
The trend of the median first-home buyer paying well above the lower quartile price holds across the country, even in the most expensive markets – Queenstown and Auckland – where the median first-home buyer pays $827,000 and $799,000 respectively.
Driving factors
The report cites access to Kiwisaver for deposits and first-home buyers' willingness to compromise on location as factors driving the increase in purchases.
It also suggests young New Zealanders either returning from overseas, or choosing not to go on their OE, due to covid-19 are adding to first-home buyer demand.
Lower interest rates and the removal of loan-to-value ratios have no doubt played a part as well.
