First-home buyers are increasingly buying more of the houses that are up for sale, but are often paying a small fortune to do so.
Twenty three per cent of all homes sold in New Zealand last year went to a first-time buyer - a level not seen since the Global Financial Crisis in 2007, according to a new report by analysts CoreLogic.
In Auckland, 25 per cent of all homes were snapped up by first-time buyers.
However, Auckland buyers had to fork out an average price of $856,467 for their homes - only 18 per cent less than the city-wide average house value at January of $1.045m.
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Those in Queenstown had to dig even deeper as they paid an average of almost $87,000 more than their Auckland counterparts.
CoreLogic senior property economist Kelvin Davidson said it was "staggering" just how much more Queenstown first-home buyers were paying now compared to a few years ago.
"From a trough of about $420,000 in 2014, that figure has now risen to more than $943,000 - an increase of nearly 125 per cent," he said.
With house prices having become less affordable across much of the country after years of growth, Davidson said it did seem weird that first-home buyers were so active in the market.
"But this apparent anomaly is explained by two key factors," he said.
Firstly, he said first-home buyers had been better able to "hang in" in the market and more willing to find ways to buy compared to investors, who were increasingly pulling out due to lower capital gains and increased costs managing rentals.
And secondly in the case of Auckland, the city's job market had more high-paying jobs in banking and legal services, allowing some first-home buyers to better compete with other buyers.
However, that was less the case in Auckland, where first-home buyers bought only 15 per cent of all homes sold last year as those in the town's tourism and hospitality sector likely found it harder to compete with "the accumulated wealth of other buyers", Davidson said.
- New Zealand Herald
