The Return of the First Home Buyer
Sometimes it can be hard to predict about the Auckland property market as it can seem like we are on a constant roller-coaster of news about house prices, valuations, and interest loans, and it can be hard to pinpoint exactly where we are sitting at times.
But a change in government and a change in attitude has brought with it, a new trend that is bringing some light to the market that is well overdue: first-time buyers are picking up some coverage again as the local market begins to cater for them.
The Core Logic Quarterly Property & Economic Market Review recently revealed that although overall nationwide sales have seen a slowdown, first-time buyers were taking advantage of this as their share of the property market activity accounted for 23% in the second quarter, the highest it has been since 2007.
So what are the factors for this new increase? It is quite interesting to look at one of the main factors is the ability to draw from KiwiSaver, but more interesting is the high cost of renting in Auckland. This is interesting because it looks like investors are pricing out these clients and almost pushing them into the market which is an interesting circle of life: is it worth pricing out your tenants to the point they are entering the market you once had a hold on? With recent reports suggesting that rents in cities such as Auckland and Wellington are only set to rise again, it’ll be well worth seeing if this trend continues in the next quarter.
The most important thing to notice in this return of the first time buyer is that they seem to not care about living in the city, which has meant they are snatching up affordable homes in the outer southern and western suburbs. The Auckland property market activity levels were revealed to be significantly below the levels a year ago in this quarter, with the exception of Rodney, Manukau, and Papakura which saw a slight increase in property values, which can be attributed to first home buyers, who are snatching these affordable properties in droves.
The Kiwibuild initiative will also play a huge part in future data as they are specifically built to cater to a first home buyer with their maximum income caps for applying and the scheme itself being born from the demand from first-time buyers. Applications for these houses were filled within minutes of launching two months ago.
So if you are looking to enter the market for the first time, don’t fret, do your research and see where others in your position are looking as its beginning to look like the first time buyer is making a most-welcomed comeback.