Three Reasons To enter The Auckland Market As A First-Time Buyer
There have been a lot of reports in the past six months about first-time buyers returning to the market and taking a higher percentage of sales overall. With all this good news it can seem a little too-good-to-be-true, which is a fair outlook after years of essentially being shut-out. But what are the factors that have made for this change, and is it worth jumping into the home owners pool? We look at four factors that may make you want to book an appointment with us!
House Prices are reaching record lows
There has been a lot of reports of the slight decline in house prices in the Auckland region – which has caused some intrigue with those who watch the market. But these slight declines and overall flattening of prices is welcomed news for those looking to enter the market as it means entry-level suburbs are easier to buy into, and prices are remaining stable which brings with it extra security.
Over the past three months house prices have slowly retreated across the region, the Real Estate Institute of New Zealand’s lower quartile selling price in Auckland has been dropping back from its record equaling high of $680,000 in March to $670,500 in June. It seems that these decline in house prices are mostly widespread across the region as well, June’s lower quartile prices were down compared to those in May in five of Auckland’s seven districts – Rodney, North Shore, Auckland Central, Waitakere and Papakura, and up compared to May in Manukau and Franklin.
Falling Mortgage Rates
With the official cash rate continuing to be lowered has had a major effect on banks’ lending, with most competing to get new customers – which has led to a huge fall in mortgage rates. falling mortgage rates has made it easier for first time buyers to enter the market and maintain steady and attainable mortgage repayments. The recent Home Loan Affordability reports estimate that the average first home buyers in Auckland would likely be paying $643.85 a week in mortgage payments on a lower quartile-priced home in the region, based on June’s figures. – this time last year, that figure would have been $683.15.
That’s over $50 difference per week compared to the same time last year, an incredible difference. And with many expecting further cuts towards the end of the year, this trend could very well continue.
Over this period of falling house prices and mortgage rates, the rate of employment and income shave risen, reducing the percentage of income that’s dedicated to mortgage repayments, making entering the market a more realistic possibility. This is perhaps the most important factor to consider when deciding to buy your first home – do you have the means to afford the payments? Its seems that overall many people at the age of purchasing their first home have steady jobs and a steady income to match the repayments needed.
But of course, many are wondering if the slight decline in prices is a temporary effect of the typical weak winter market or possibly the start of a flattening trend, many will be keeping an eye on the market in the coming weeks as we approach warmer weather to see if first time buyers hang onto their market percentage.