How much? NZ's property mini-revival

Date: 22 May 2018

The latest results are out and NZ’s property value growth has enjoyed a comeback recently, with the national property value average rising from February’s 6.5% to 7.3% in March. This 0.8% lift may not seem monumental, but it represents the strongest annual growth rate since June 2017 – no doubt underpinned by continued low interest rates and high employment rates.
NZ’s average value of housing stock is now $667,618 with residential real estate asset worth a total of $1.08Trillion. 
To understand the types of buyers currently active in the market, we looked to CoreLogic’s unique measure of buyer classification data, covered off in this month’s NZ Property Market and Economic Update Report.  
Just 27% of sales went to a group of people identified as ‘movers’: those who have sold an existing property and purchased another.  This group is also currently showing great skill for biding their time. Patience may be a virtue, but it’s easier to practice when you’re not desperate to get onto the property ladder in the first place. 
‘First home buyers’ are making the most of KiwiSaver fund access for deposits and a more partly flexible lending environment, with the easing of Loan to Value ratios and lower interest rates, somewhat countering stricter serviceability criteria. They’ve held their ground in the past few months and account for a healthy 22% of sales across the country. This group is willing to sacrifice home type/location to take that first step on the ladder, especially in Auckland.
‘Multiple property owners’ (those who own more than one property) have returned to their market share of 37%, but it’s those not requiring finance that are keeping up the share, as mortgaged multiple property owners now account for only 24% of sales (non-mortgaged with 14%) compared to 27% and 12% respectively in 2016. They may be facing extra regulations around the provision of rental property, and the threat of more tax but it doesn’t appear to be deterring all property investors, just those who require funding.
Head of Research Nick Goodall  comments: “Although the mix of buyer type varies around the country, ‘first home buyers’ are currently the group showing greater resilience in NZ’s property market and  contributing to values holding firm - an interesting market dynamic to note as we head towards the Winter period”.
To get a fuller picture of what’s happening in the NZ Property Market, download your free copy of the report here

Tags: First Home Buyers, New Zealand, Property