First home buyers are starting to dominate the property market flocking to open homes and making up a quarter of all property sales so far this year.
The lift in their market share comes as one agent warns first home buyers who don’t take advantage of the lowest house prices, bigger choice and less competition the country has seen in at least several years shouldn’t complain.
The number of relocating owner-occupiers made up 26% of all property transactions in the first quarter of 2023 - down from 31% in the same period last year, while the number of first-home buyers bucked the trend rose to 25% from 22%, according to CoreLogic’s latest buyer classification data based on title transactions.
Those owning multiple properties such as investors have also dipped and now makeup 21% of all purchases, while cash multiple property owners have lifted to 15%. Overseas buyers 6%, those re-entering the market 6% and other buyers 2% have remained relatively flat.
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CoreLogic chief economist Kelvin Davidson said while the overall number of property transactions is significantly down on the first three months of 2023 compared to the same period last year, first home buyers have managed to increase their market share.
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It is a good time for first home buyers to enter the market as long as they can get over the challenges of securing finance which includes servicing the highest interest rates in more than a decade, he said.
“Once you’ve got finance you are seeing reduced competition from other groups, you’ve got good choice of properties on the market, prices have fallen and a few more properties have come back into your range.”
CoreLogic chief property economist Kelvin Davidson. Photo / Supplied
In Hamilton, first home buyers made up 32% of all purchases compared with 25% the same time last year, while Auckland first home buyers jumped from 25% to 28%. They also increased their growth by 2% in the other major centres with Wellington rising to 32%, Christchurch 29%, Dunedin 26% and Tauranga 17%.
Lodge salesperson Chase Gray said there are a “bucket load” of first-home buyers looking in Hamilton and the entry-level three-bedroom homes priced $750,000 and under are getting the most foot-traffic at open homes.
Most of the first home buyers are locals who have saved up their deposit and are approaching house hunting with open minds and a new realisation that it is their first home not their forever home.
While some are picking up properties on freehold sections in good areas in the mid-$700,000 such as a property in Tudor Crescent in Chedworth that recently sold for $795,000, a three-bedroom, one-bathroom on Bankwood Road in Chartwell for $730,000 and an entry-level home on Sandwich Road in St Andrew’s for $720,000, he said others are happy to start with cross lease properties under $650,000.
A property on Sandwich Road was marketed as an "established first home" and attracted just that. Photo / Supplied
Gray said buyers seem to have more confidence in the market and don’t feel like they will have to pay an excessive amount just to get on the property ladder.
“They are confident they’ve got a good budget and they can get a property within that budget now.”
Harcourts Glenfield salesperson David Ding feels like first home buyers are even more dominant in the central North Shore and estimates more than half the properties he’s sold have been to first home buyers.
An open home for a property at 47 Girrahween Drive in Totara Vale attracted 25 groups at the weekend and most of them were either first home buyers or parents shopping for their adult kids. “There’s no developers, there’s no investors, there’s no downsizing.”
A three-bedroom, one-bathroom home on a cross lease section usually started from the mid-$800,000s and into the $900,000s if it is renovated. He recently sold a three-bedroom, one-bathroom property on Bronzewing Tce in Unsworth Heights to a first-home buyer for $903,000.
Ding agreed with Davidson that it is a great time for first-home buyers to get on the property ladder because of the huge amount of bargaining power they now seem to have around price and conditions.
“This is the best time to buy in generations. If the first home buyer doesn’t appreciate this opportunity, do not complain.”
And it’s not just salespeople noticing the influx in first home buyers, Harcourts Hamilton director Campbell Scott said mortgage brokers and valuers have also been commenting about the increase in work coming from that buyer pool.
“They are dealing with more offers and contracts from first home buyers and that’s been happening for a few months, but it seems to have been more obvious in March given the real lift in the volume across the market.”
In the under $700,000 price bracket, first-home buyers recently purchased a property in Murray Street in Chartwell for $659,000 and another on Crosby Road for $670,000.
While Scott cannot pinpoint why Hamilton's first home buyer market share may have had such a sharp increase, the falling market may have also helped lure them back. Hamilton’s median house price is now at $750,000 and, he added, there is a much greater choice of properties for sale in the entry-level price range of between $600,000 and $700,000 compared to the peak of the market. His agency alone has 77 houses priced between $500,000 and $700,000 for sale that he thinks might appeal to first home buyers.
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