First home buyers are back

First home buyers are returning to the housing market, according to Antonia Watson, ANZ’s managing director retail & business banking, with low interest rates a strong motivator.

Watson says first home buyers accounted for 22 per cent of all house sales in the three months to December 2017, up from 17 per cent three years ago. She says the number of first home sales dropped significantly when the first round of loan-to-value restrictions was introduced by the Reserve bank in 2013.

A February survey of 1000 people by UMR Research for the bank found that 39 per cent of respondents who don’t already own a home felt buying a home was out of reach. Despite this, home sales over the past six months indicate first home buyers are playing a bigger role in the overall housing market.

“We know it’s been a real stretch for many first home buyers to get their foot on the ladder – particularly in Auckland - so it’s great to see more first home buyers coming into the market,” says Watson.

First home buyers in Auckland were targeting suburbs such as Waitakere, Manukau and Papakura, where there were still lower priced three-bedroom houses. First home buyers make up almost half of all recent home sales in these areas, according to Watson.

Hot suburbs outside of Auckland include Porirua, Hutt City and Wellington City. In the South Island, Christchurch, Ashburton and Invercargill are popular spots for first-time home buyers. First-time home buyers in Christchurch are at record levels, accounting for almost 26 per cent of all residential sales last year, up from around 23 per cent at the same time last year.

Where there has been a downturn, according to the bank, is with people selling and buying to move home. In Auckland this has dropped from 25 per cent to 22 per cent of the market - the lowest level since 2009.

Watson says this could reflect that more Auckland home owners are staying put in an uncertain market.

First home buyers were not so active in regions such as Tauranga, Hamilton and Dunedin where investors have typically played a strong part.