First home buyers are making up an increasing share of the housing market, according to the country's largest home loan lender, ANZ Bank.
ANZ's managing director of retail and business banking, Antonia Watson, said first home buyers accounted for 22% of of all house sales in the fourth quarter of last year, up from 17% three years ago.
And they were particularly active in Christchurch, accounting for almost 26% of residential property sales in the city last year, up from 23% a year earlier, she said.
Unsurprisingly first home buyers in Auckland were targeting suburbs on the city's outer edges, where lower-priced homes were available.
In some of these cheaper suburbs, first home buyers accounted for nearly 50% of sales, she said.
However, balancing that, ANZ had seen a decline in the number of people in Auckland who already owned a home moving to a new one.
That had dropped back from 25% to 22% of the total market.
"This is the lowest level since 2009 and could reflect that more Auckland home owners are staying put in more uncertain times," Watson said.
However first home buyers were not so active in provincial centres such as Tauranga, Hamilton and Dunedin, where investors played a major role.
However Watson warned that while historically low interest rates were helping people into their own homes, borrowers should be prepared for possible rate increases.
"We're encouraging customers to also factor in the possibility that rates could increase in the future and ensure they are able to manage mortgage repayments if that happens," she said.
79 Comments
A flippant comment not really valid.
This has nothing to do with politics but rather the property market. Changes by the RB to LVR, rental yields being such that property investors are holding back, and it would appear that existing homeowners are preferring to stay put rather than taking on higher mortgages with potential of higher interest rates.
I see nothing that the new government has done.
"However, balancing that, ANZ had seen a decline in the number of people in Auckland who already owned a home moving to a new one.
That had dropped back from 25% to 22% of the total market.This is the lowest level since 2009 and could reflect that more Auckland home owners are staying put in more uncertain times, Watson said"
Probably because they cant sell their current home for what they want for it and its sitting in the stockpile of 12500 homes for sale on Trade Me.
Why would that be? This is for people moving home i.e. selling and buying on the same market. I'd say factors are the uncertainty over what you will pay for the new home, the cost of selling and moving, the realisation that there's a lot of dross out there so best to stay with a known position and the impact of a new government making life less certain.
Really pleased for the FHB realising what is a widely held Kiwi aspiration. The hope of homeownership is not universal in all countries such as a number of European nations.
With property prices at best plateauing or more likely seeing some decline in the near future will see more FHB being able to enter the property market.
As pointed out in the article; hikes in interest rates may be likely and will pose issues for FHB for increased costs in servicing loans. As houses are overpriced to value (rental yields and affordability) any significant increase in interest rates are likely to drive prices down and there is the risk of some loss in equity for current FHB.
"The hope of homeownership is not universal in all countries such as a number of European nations"
True, I grew up in an apartment building and I had a great childhood there, there were large green areas aroud the tall buildings and we all congregated there to play after school.
I lived in the country on a farm, getting the cows in with a motorbike, riding around on a tractor. Friends from school would stay the night, or we would play sports in the weekend.
I know how I prefer to live. In the country near a beach. I have had enough of that after living in London for 16 years.
But I agree if we are to have affordable homes in Auckland then this is a great way to start.
Yes the new government is certainly achieving what it promised to do during the election. A more level playing field in New Zealand that enables first home buyers to get on the ladder. Auckland and Christchurch have been drifting back for some time and hopefully other areas of New Zealand will do the same. This government will be sticking around for at least one more term as they actually want to help all sectors of society , not just those at the top.
Just admitting we have a housing problem in parts of New Zealand for a start. Something National was never going to do. Then they are going to implement a few measures such as restrictions on overseas buyers, five year bright line rule, removing negative gearing and kiwi build. No wonder National lost the election.
RP, I'm sure you know it was a reference to the Leftie bedtime book, 'Of Mice and Men'. My son came home last month asking for $4 to pay for a copy pirated by his teacher for class study. I refused on the basis that it's wrong to pirate, but it was really a passive aggressive way of saying I don't want my child reading that type of literature. He's not destined to be part of the hive.
It's an American classic, 'Grapes of Wrath' is probably a better depiction of leftist angst though, another great piece of work, Steinbeck was brilliant, the Dickens of the USA. What's your boy allowed to read? Ann Coulter? Nestle in to a spot of 'Treason: Liberal treachery from the Cold War to the War on Terrorism'?
Animal Farm, Liars Poker, Book of Mormon (one of those is untrue)
BTW: Teachers never change their political ways. I was forced to read 'Chips with everything', The Admirable Chrichton', 'The Guardians' and just escaped watching 'My Fair Lady'. Some Brits brought the Class Struggle with them.
Nah, sounds like they'll grow up nicely indoctrinated to align with their household lifetime National membership.
At some point it behooves folk to move beyond the base right vs. left dichotomy - especially given it's being confined to ideology more than action or actual policy in NZ.
I can't see how that's possible in the Westminster model of democracy. I don't want it in any case as I don't trust any politicians, I just distrust the Left more than the Right. The thought of them colluding for convenience e.g. like Labour and NZ First now makes me very nervous. That's one reason I like the tit for tat here with the Left leaning posters. I don't want them to perceive the Right as likable, and vice-versa.
Meh, I don't necessarily dislike right wingers nor find them too objectionable in the main, in an I'm not rightwingest mode, I've got friends who are right wingers. You've been abroad, done your thing, made your money, bought a house in a great area, hats off to you, you're not someone who bought a house 30 years ago and leveraged it to buy more, and now think you're the bastard love child of Warren Buffet and George Soros.
Agree, we'll always have parties.
But when most of what they do is the same as each other, it renders the more ideological of their fans' viewpoints rather nominal and unrelated to reality. National's no more a party of self-sufficiency and libertarianism than Labour is - they just have a slightly different mix of beneficiaries of their socialism. E.g. National was campaigning on increasing redistribution that takes from you and I and subsidises company wages and property investors.
And even our most stridently right-wing ideologues seem to want their means-test-free pension. A nice wee touch of Ayn Rand.
Yeah. Correct. Even on ban on foreign buyers are playing with time.
If wanted could have speed up the process but I guess that was a political gimmick by Labour with no real intent.
Real Shame for all who voted Labour. Atleast National though never did anything but also did not promise anything.
gordon, your comment is fiction.
The new government has not yet achieved any of its promises, they may over time and granted it takes time to achieve their lofty ambitions but you can certainly not say they have achieved much yet.
Also look at yesterday's QV figures to see how much "Auckland and Christchurch have been drifting back for some time", again fiction
Yvil, "The new government has not yet achieved any of its promises" Ok - your excused. You've been asleep for the last six months;
One year free tertiary study
Abolish letting fee
Healthier homes bill
Extending Bright-line 2-5 years
Bored yet? Wait, there is more!; http://www.labour.org.nz/100_days
I have saved this opinion piece specially for you RP, I am sure you are gonna like it... just grab a drink and sit tight while you read it ..
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=120…
Brilliant Question , alas asked the wrong person!
What would an illiterate know about solving problems ? .... PT has no clue on anything !! he is just the delivery boy with the yellow smiles ! and the mouthpiece for cursing National when needed.
This CoL promised to throw most of their inheritance to the wind in order to get the votes and when it came to serious spending they started milking the voters dry ...!
A lot of that will be gone on inflated Gov agencies, committees, meetings, and associated crap in MoT and Police etc ...while few barriers would do most of the work ...Talk about productivity !!
There is no accountability in this country , so they can do what they like as long as they have fooled enough people to support them .... Disgusting really !
2020 is NOT that far away.
And now we find out that National's proposed transport plans would also have required an increase in fuel tax to fund them - and this was kept quiet in resistance to OIA requests.
Once again undermines that whole left vs. right dichotomy when both National and Labour presented transport plans that required additional fuel tax to fund them, and the key differences are 1) Labour increases investment in public transport, and 2) reduces the possible maximum on highways to National's 2015 level.
Looks more like it's simply a good thing when one party does it and a bad thing when the other does it. Automatically, like a jerk of a knee.
Echo Bird, Its early days but its not pretty. I guess we will never know of Nationals proposed tax cuts would have sunk them too....Yes, we will never know - (sigh) Under Nationals wide open door immigration policy the infrastructure was beginning to creak and groan. No matter who presides, playing catch up is a costly exercise. It's a sad day when Government lack the insight to invest in infrastructure before the ambulance strikes the bottom of the cliff........
lol, stop doing this to yourself RP .... you are really disappointing your fans...
Don't worry about National, they are GONE ..start worrying about your mates who are spending like a drunken sailor.
"Under Nationals wide open door immigration policy the infrastructure was beginning to creak and groan " ...
Haha, seems like your mates are not so keen on closing it either !!
Didn't you know?, they are now begging for every extra Million coming from that rusty creaky door ...
So where did you think all this money and surplus came from in the last 4 years ? ... Grown in Pukekohe, Te Puke or Ohakune ? .. or NZ has won lotto ?
This CoL started to find out that there is a price to pay for having a BIG MOUTH !! and putting noobs at the helm of a ship !!
Enjoy the show mate, it's gonna get uglier from here !
Echo Bird, keep the blame game going. It's fun reading all the COW's convenient political amnesia.
if it comes to the crunch, Labour could always fall back on the Superannuation Fund (Labours Cullen Fund) that National REFUSED to contribute too, let alone support. They have my vote to plunder it in the event of a fiscal emergency. National need not complain because as far as they were concerned it should never have existed.
Hey, imagine all those extra PAPER surpluses that could have been declared if the contributions had continued uninterrupted! Again, I guess we will never know (sigh)
Yep, Yvil, the article tells us what most of us already to know - the new Govt is in trouble.
A group of novices making far too many blunders.
Things may improve when Peters becomes Acting PM. He has far more skill and experience than Jacinda. But will he channel it in the right direction????
TTP
I bought my first home this time last year, moved to a small town with access to reliable commuter service to the city. My mortgage is 1/3rd what I’d be paying in the city, we can increase the payments to match a city mortgage and have it cleared in under 10 years.
Big down side is being away from all my family and friends, completely separate island but it’s a small sacrifice for big potential gains.
Now TTP, before you get too excited and conveniently misconstrue the following comments to mean something else, note one thing. I still believe there remains a very high risk of a crash landing. It's highly unlikely one year let alone ten could pass without a complete unraveling of this ludicrous global ponzi.
Since you previously endorsed my commenting a "best scenario" outcome of ten years of house price stagnation, how can you state with a clear conscious that now's the ultimate time for FHB to take the plunge? It is indeed you that is irresponsible and not to mention understably opportunistic in your quest for property related commissions. Adjusted for say 1-2%pa inflation, a considerable decline in property values over a ten year period could be store! Thats one seriously underperforming asset class staring at you in plain sight. All the while, FHB term deposit savings earn interest and they are free from all other costs associated with home ownership.
As you know, nzdan has caught the tailwind of provinces playing catch up with Auckland. He has bought a home to live in and like many is reporting unbanked capital gains. Right now, Auckland is at the forefront. It is experiencing a growing glut of unaffordable homes. Playing catch up, the provinces will soon find themselves in a similar predicament. Its old news that one of the reasons provincial house prices benefited, is that smart Aucklanders took advantage of a unique opportunity and banked their equity.
FHB should wait. Waiting is the perfectly sensible and logical choice to make. The biggest financial decision of a lifetime should not be driven by fear and anxiety of missing out.
Those like yourself who diss savers are destined to live the hazardous life of a debt junky and you only have yourselves to thank for that!
Hi R-P,
I have said that house prices will be relatively stable for the foreseeable future.
I can't tell just how long that might be - but very much doubt it will be for as long as 10 years.
It's good (but not surprising) to note that first home buyers are especially active in the current housing market.
Fortunately (and wisely), many of them are ignoring the advice of the DGM (doom and gloom merchants) here who have been urging first home buyers to delay purchasing.
TTP
lol, what a load or rubbish RP .... you started sounding like BH back in 2011
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&obj…
Yes, I keep this piece on file to remind you and other DMG how wrong and dubious their thinking and analysis skills are.
People who followed that advice in 2011 from the " Economist " BH Not only lost tons of money ( as houses have more than doubled in price since), but LOST the opportunity of becoming a proud homeowner for a very long time !!
RP, What experience and qualification do you have to offer such an advice to FHBs?
From what we know, You could merely be a shack owner at the skirts of Auckland who have bought once in his lifetime 18 years ago -- and saving few pennies in TD at 4% pa before tax ...
you even do not have the wisdom to evaluate your TD investment as it is returning practically next to 0% pa after tax and adjustment to inflation! ......so are you telling FHBs to commit the same stupidity ?
After exposing yourself to be highly UNQUALIFIED and absolutely UNRELIABLE person to give any sound investment or financial advice...I suggest that you stick to what you know RP and pull your nose out of what you don't...!
Being a CoL supporter is one thing, but throwing around silly advice is another .. you don't seem to know the difference.! and for that we need to keep exposing your rubbish to the public, even at the risk of being called fools.
Echo Bird, TTP, and Houseworks - WOW!, You're all cheerless grief stricken individuals on a mission to trash sensible pathways for FHB. You're feeling threatened......
Again, it's the wrong time for FHB's to buy. It's a telling warning when Spruikers consistently pump out comments derived from justified fears of the parties end.
theglc, RBNZ First Home Buyer vs investor $$ figures here; https://www.rbnz.govt.nz/statistics/c31
Although, as yet there are no figures for March to compare to ANZs claim above.....
So first home-buyers are 22% of the market (nationwide) and movers are a similar percentage (in Auckland). Who is buying the remaining 56 odd percent (assuming Auckland and national percentages are comparable)? Is it investors? I would have thought that anymore than 50% of sales going to investors would imply an increase the proportion of households renting rather than owning - which many might regard as a bad thing.
I found this article frustrating to read with the lack of a breakdown of buyer categories and market share and the mixing of national and regional stats. It seems like a spin article from ANZ obfuscating the fact that owner-occupiers are a relatively small part of the market. Any chance the complete data could be published?
Check out www.qv.co.nz or www.corelogic.co.nz they will give you the exact breakdown including graphs but no investors don't represent over 50%, from memory I think it's roughly 27%
Isnt the "property ladder" akin to the road to nowhere ? Do people really aspire to climbing this mythical ladder ?, to handing their banks ever increasing interest payments on their mortgages. I guess if one of the ten commandments was - Thou shalt cross bank shareholders palms with silver - it would all be worth it.
At times, there can be a fine line when buying property. The difference can mean getting on the property ladder to prosperity or into the money pit to financial agony ... They key determining variable between the getting the first result or the latter result is .... ??
Sure, if you're increasing equity - but many are on interest only and/or paid over the odds for the house. So rent may be cheaper than the interest portion of loan. This will likely be the case in Auckland.
For example, a $1m house, $800k loan would cost say $36k in interest alone, or ~$700p/w. Plus maintenance, rates, insurance (eg $150pw). Rent on a similar or better property in Auckland may be ~$600 per week... so a differential of $250pw.
The real question is, will the $250 additional per week perform better than a different investment? Easy to say when the bubble is booming, but hard to say when outlook is flat or even declining.
Just saying the decision needs to be more balanced and thought through than simply "I dont want to pay my landlords mortgage", when, in Auckland, that may not even be true.
" Isn't the "property ladder" akin to the road to nowhere ? Do people really aspire to climbing this mythical ladder ? "
Umm, No it is not a Road to Nowhere, nor it is a Mythical Ladder !
The feeling and experience is very real and obviously you haven't had that yet ... even hippies and bohemians enjoy owning a place they call Home.
Some prefer to hand ever increasing entertainment costs to the clubs and bars every weekend and spend it on piss instead - but will wake up broke the day after.
Its a personal choice,
Even if home ownership ends up costing you more over 25 years than renting, it’s well worth it when you don’t need to deal with the uncertainty around renting.
I’ve had it where the landlord wanted us out to make way for their family, fair dinkem but not a great position to be in.
The only thing ( enforced) long leases will bring is the increase of homeless people and bigger numbers of unwanted tenants on the HNZ waiting list.
Long leases will only be signed with exampliary fantastic tenants who have manners, discipline, and can look after a property for a long time -
When you cannot get rid of bad tenants using the law provisions in place now, then hardly any landlord will bother signing them up in future.
That will be an eye opening example of "Unintended Consequences" .
It will all go down the gurgler in any event when the new petrol tax plus GST ( note) is enforced.
FHB's will avoid the very outer suburbs as the cost of transport to and from work, not to mention running the kids around, will be just too dear. Public transport is still pathetic and take years to catch up if ever. Expect more builders of "affordable" homes to go under as demand dries up.
FHBers be patient, at least wait until the middle of winter to start looking as you will get a clearer picture of how much the market will drop and the house condition you are looking at ie dampness, leaks, dryness and sun aspect. There will be over leveraged investers needing to off load and will not have the luxury to hold out until spring, remember it may not look pretty on a cold bleak day but you may save yourself thousands.
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