First home buyers are getting back to levels seen pre covid, and this is down to the work that the government has implemented in regards to their Kainga Ora products. Products like First Home Loan, First Home Grant, and First Home Partner (currently on hold due to an over demand) are three initiatives that have been implemented with the aim of making it easier for New Zealanders (Resident visa holders, to Citizens) to buy their first home.
- Regional Resurgence: First Home Buyers Dominance Across New Zealand
The impact of these initiatives is evident in the resurgence of FHBs in the property market. In the third quarter of this year, FHBs accounted for a staggering 27% of houses sold, surpassing the long-term average of 21%. This surge is a testament to the effectiveness of Kāinga Ora products in providing tangible solutions to the challenges faced by aspiring homeowners.
Kelvin Davidson, Chief Property Economist at CoreLogic NZ, highlights the favorable market conditions for FHBs, who are overcoming challenges such as high interest rates and the cost of living. This resilience is underscored by their commitment to homeownership, employing strategies such as low-deposit lending limits, utilizing KiwiSaver for deposits, and taking advantage of First Home Grants or Loans.
This positive trend is not confined to a specific region; it permeates New Zealand’s main centers and provinces. Wellington and Invercargill, for instance, have exhibited a robust market share for FHBs, surpassing their usual averages at 33% and 32%, respectively. The broader decline in property values has further favored FHBs, with the median price dropping from $720,000 to $690,000 in 2023.
- Adaptability and Strategies: FHB Triumphs Amidst Challenges
However, it’s essential to note that this median price, while reduced, still exceeds the lower quartile across all buyers. Auckland’s FHBs, in particular, face the highest median price at $875,000 this year. Despite these challenges, FHBs are adapting and finding creative ways to step onto the property ladder.
Property type preferences among FHBs reflect their adaptability and resilience. Standalone houses remain the dominant choice, constituting 71% of FHB purchases nationally in Q3. The increasing popularity of flats, especially in urban areas, is notable, driven by improved affordability and availability.
In conclusion, the government’s Kāinga Ora initiatives have been instrumental in breathing life into the dreams of first home buyers across New Zealand. Against the backdrop of economic challenges, FHBs are embracing the possibilities of homeownership, buoyed by strategic initiatives, lower property values, and their own unwavering determination. The resurgence of first home buyers is not merely a statistical uptick; it’s a testament to the enduring appeal and feasibility of homeownership, even in the face of adversity.
Information obtained from https://www.goodreturns.co.nz/.