First-time buyers dominating Kiwi property scene
First-home buyers remain the dominant group in the Kiwi real estate market, buying more than 40% of all properties in the first half of this year.
With listings up 120% in less than three years, first-home buyers are enjoying a wider choice of properties and a strong negotiating position.
They’ll likely receive a further boost with an additional spike in available properties as investors look to sell and avoid capital gains tax thanks to a change in the “bright-line” tax rules that have been in effect since July 1.
According to the OneRoof-Valocity House Value Index, first-home buyers represented 42.8% of all purchasing mortgage registrations in the first quarter of this year. Initial figures for Q2 suggest the figure will dip only slightly to 42.4%.
Meanwhile, the rules regarding debt-to-income (DTI) ratios for loans have become tighter since the beginning of this month.
All borrowers will now have loans more closely tied to their income. This will restrict a lender’s ability to feed a market boom with generous loan agreements that push prices artificially higher.
The move is seen as another plus for first-time buyers, as it makes it less likely that they will be priced out of a rising market.
While first-home buyers are powering what has become a tougher NZ market, they’re not getting everything their own way. In a surprise move, the Government has announced it will scrap the first home grant scheme.
A further challenge has been the Bank of New Zealand’s continuing commentary that it will not reduce its 5.5% Official Cash Rate (OCR) until inflation falls into the 2% rate.
Meanwhile, the Valocity House Value Index has found:
A 3.33% increase in property values in the three months to the end of May, compared with the corresponding period last year.
The average home price is $975,000.
Eight regions achieved value growth.
Leading performers were the West Coast and Southland.
The West Coast saw average property values rise 4%, or $18,000, to $468,000.
Southland enjoyed a 3.4% hike, taking its average property value to $551,000.
Three regions suffered value falls – Auckland, Bay of Plenty and Gisborne.
Bellwether market Auckland saw house values dip 1.1%.
Only two metro areas achieved value rises – Christchurch (0.5%) and Dunedin (1.8%).
Let’s discuss your home selling strategy.
By choosing us, you’ll benefit from our expertise and commitment, ensuring you feel confident and valued throughout the entire process.
