First home buyers (FHBs) made up a record high 27% of the market share in the third quarter, according to CoreLogic's latest report.
NZ chief property economist Kelvin Davidson says despite cost of living pressures and high interest rates, first home buyers in Aotearoa are still finding a way to get their foot in the door.
"Whether it's using the low-deposit lending speed limits at the banks, tapping their KiwiSaver to help with their deposit, securing First Home Grants or First Home Loans, or compromising on the size or location of their home, First Home Buyers are proving relatively more successful in buying their first home than at any other time," Davidson said.
Wider Wellington has held the strongest market share for FHBs with 33% of purchases in the year to date, while FHBs in Tauranga held 21% of purchases.
Auckland, Christchurch and Dunedin each report 5% higher than average, with Hamilton above 6% for 2023.
Provincial markets show a similar trend with Invercargill holding 32% market share. Other areas where this was high include smaller regions like South Waikato, Whangarei, Rotorua, Napier, Hastings and Clutha.
In contrast, Queenstown continues to struggle at only 13%, down from its long-term average of 15%.
Looking into the future, Davidson says there are promising signs for those wanting to buy their first home, but they could soon be challenged by other buyers.
"It wouldn't be a surprise to see FHBs continue to hold onto an above-average share of property purchases in the next six to nine months. We do not expect runaway growth in house prices for the foreseeable future, especially if or when caps on debt-to-income ratios for mortgage lending come into force next year," he said.
"However, with the change of government and the slow softening of the tax system for property investors that lies ahead, namely a shorter Brightline Test and the full reinstatement of mortgage interest deductions - FHBs may find some competition returning from this cohort."
A recent report shared exclusively with 1News also warns first home buyers they may never be able to save a deposit for an average priced home, with predictions that the average Auckland house price deposit will be $1 million by 2045.
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