First home buyers and investors now accounting for just over half of all residential property sales as existing home owners sit tight

First home buyers and investors now accounting for just over half of all residential property sales as existing home owners sit tight

House prices may be heading skywards once again but first home buyers are getting into their own homes in record numbers.

The latest figures from property data company CoreLogic, show that first home buyers accounted for 25% of all residential property sales in the third quarter of this year, giving them their biggest share of the market since CoreLogic began recording the data 15 years ago.

In its latest Market Pulse report, CoreLogic said first home buyers were being helped into their own homes by record low interest rates and a willingness to consider purchasing apartments rather than stand alone houses.

They have also been making record withdrawals from their KiwiSaver funds to put towards a deposit, with 44,300 KiwiSaver withdrawals in the 12 months to March this year, up from 39,600 in the previous 12 months.

Investors are also increasingly active in the housing market, just slightly ahead of first home buyers with a 26% market share in the third quarter of this year, the highest it has been since the record 28% set in the third quarter of 2016, just before the Reserve Bank introduced a 40% minimum deposit requirement for residential property investors.

The growth in first home buyers' and investors' share of the housing market has come at the expense of existing home owners, who appear less inclined  to sell their homes and keep moving up the property ladder.

For the time being at least, they appear increasingly happy sitting tight in their existing homes.

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"existing homeowners sit tight" and why wouldn't they when all they have to do is sit back and watch their tax-free net wealth appreciate by hundreds of thousands of dollars year?! (Of course, we all know that's a mirage. The second they do want to move those Net Worth Gains evapourate into the price paid for the next place..but it looks good on paper)
And as long as our young continue to eat their futures, now, by "making record withdrawals from their KiwiSaver funds to put towards a deposit" all's well with the World.
(Has anyone bothers to wonder what all that disposable income and debt tied up in property 'investment' could be doing if applied to an alternative application? Building a more robust and dynamic economy would be my guess. But alas, it isn't)


When things improve I suspect we will see a mass exodus to Aus

Which ironically will improve the homeownership rates in NZ.

Not quite - our government will use that as an excuse to import thousands more, leaving us worse off.

And people really underestimate one aspect of their CV that is gold to potential Australian employers:

Nationality: New Zealand

And people really underestimate one aspect of their CV that is gold to potential Australian employers:

Nationality: New Zealand

It's crazy here in nsw too,I'm looking for a place to rent in regional nsw ,very little stock ,RE agent said they have never seen the market like it, they tell me investors are backing off and sitting tight until prices drop in the meantime rents are starting to rise and demand is stripping supply ,what happens when people have to walk away from their homes,they have to find somewhere to live ,rental demand increases and investors continue to sit on the fence hoping the market will continue to fall,its an interesting perspective.

Contact Martin North at Digital Finance Analytics. Give him the postcode you are looking at and he’ll provide you with rental stress, mortgage stress, data plus a whole lot more which may indicate if more property is likely to be listed. It’s proving very popular on his “walk the world” Youtube channel.

Edit: See my comment below. This data is inconsistent with RBNZ data and I feel possibly based on poorly reported data by agents.

“Existing homeowners sitting tight” surprises me. Given considerable gains in equity and falling interest rates I thought many would be looking to trade up a step in the property ladder but seemingly not.
Increased investor activity is also worth noting. Investors decisions are (or should be) based solely on economic decisions. Investors tend to have experience of property, and if not already owning a rental are usually already homeowners.
So yields (and possibility of capital gains) mean investors feel that it is financially worthwhile. That should provide some assurance to renters becoming FHB.
Great to see those FHB achieve homeownership. They have initiative and commitment, and meet the banks’ requirements regarding ability to service the mortgage including both employment security and the 6% stress test; they need to disregard negative comments most likely to be posted.

Why wouldn't the banks take undue, even irresponsible lending risks when they know if push comes to shove the Govt will use our money to bail them out a la the BNZ in 1990. They are on a free roll, gambling with our money.

And I wonder what will happen to savers money if a bank goes bust. How many savers will end up taking a haircut.

"Investors decisions are (or should be) based solely on economic decisions."
Absolutely, and any investment that relies solely on Capital Gains isn't an investment, it's a speculative gamble, because the future price of any asset is unknown ( it's a guess, in other words, no matter how informed it is) whereas investment is based on cash-flow - a profitable return on past work effort retained. Sure, it may need to be 'topped up' with debt, but unless it makes a return that justifies the risk and exceeds the cost of financial input, it isn't an investment.
(In the Dark Ages 700 x the weekly rental income used to be the yardstick for the viable purchase price, and I'm sure there are better ones today. But any strategy that relies solely on tomorrow's sale prices is risking failure, simply because no one knows what's going to happen. Covid19 being a good case in point. What happens next?)


In my circles, my friends and work colleague peers (35-42yo, white collar) are currently unable or unwilling to upgrade to the ‘next step’ due to the realities of children and single income (+ a little bit) type situations.

Most of the people in my circles have had REA around to discuss potential prices for existing homes.

As an existing owner, despite the equity we now “have” in our home, my partner and I would have to almost double our mortgage to upgrade to the ‘next step’.

Barring some miracle or death of an unknown family member and thus inheritance, either we prioritise a house or we prioritise our family relationships. That’s what it has come down to for us.

"my partner and I would have to almost double our mortgage to upgrade to the ‘next step’." Precisely! So that Net Worth you've accumulated? It doesn't just evaporate with any 'next step' it gets replaced by .....more debt. And however 'cheap' debt is, it's still more of your future spending power ( capital repayment) being consumed by just one item - your home.

Yep. It’s frustrating. My brother in law often says if there was a choice then “own your investments and rent your lifestyle”. I wish I had the balls to do it. Of course the emotional connection to a home sways my thoughts somewhat.

Same boat. No real answers forthcoming, during an election campaign, no less. I suspect Brisbane and Queensland are about to take on a whole swag of new Kiwis in the next 18 months; for many, it will be the only chance to ever get debt-free.

Can vouch 100%. I'm saving six times as much over here in Australia as I was in New Zealand.

I was offered a job in Sunshine Coast a few weeks ago (which I declined), but this is the property market up there at present.,+ql...

Most Kiwis would dream of these prices, and thats before factoring in the increase in pay you're likely to receive and the reduced cost of living.

That's the equivalent of a 1bed unit in downtown Gisborne. I'll take my million in debt in Auckland any day.

You'd have to take on much more debt than you would have in the past to take a step up the ladder - in many cases as much as they spent on their house in the first place. Perhaps a lot of people just don't want to take that risk right now.

"watch their tax-free net wealth appreciate by hundreds of thousands of dollars year" You're right it is a mirage, it is not real in any terms or by any measure, but not for the reasons you state. It is a mirage just because it is not real. It is just a theoretical value that someone else thinks it might be worth. It is a long way from money in the pocket. And only the petty minded, jealous people would think that value should be taxed.

"it is not real in any terms or by any measure"'s pretty real if you're a FHB, the fact that it's only a paper profit is neither here nor there, the source of your wealth shouldn't make any difference as far as the tax man is concerned.

I was a FHB in 2017 when we were at the apparent "peak". I have sat back and watched it increase in value by $8700 a month, enough to take out equity and buy another, hopefully starting a portfolio that will set my son up for success in 20 years or so.

Well done for taking charge of your own life rather than just moaning about it (or hating others that are successful). You reap what you sow

Yes you do - property investors using equity in other properties to buy more properties and outbidding FHB's, who simply want a home to raise their family, can equally expect their disgust (and potentially hatred) directed toward them. Success is helping people, not oppressing them for your own financial benefit (when often you already have enough).

Boring and repetitive.

What are you flying high on?

I am a frequent flyer but not lately obviously

I thought you might have been an advocate for the marijuana referendum - my mistake.

I just cashed in all my FF points for retail vouchers. I am concerned what will happen when they go broke.
Qantas FF recently added significant delivery charges to getting items with points and reduced the value of then by making redemptions cost more points.
During lockdowns they also made is difficult to redeem them.

That's fine and it doesnt make you a bad person but the fact that those who bought 3 years ago can now go to the bank, borrow a bundle and outbid FHB's who have been saving for 10 years tells you that the market needs some form of intervention.

I was talking to a Real estate agent in the weekend, he said this is going to be the biggest property expansion of all time. He said “it was wonderful to be part of such amazing economic prosperity, my work colleagues are equally pleased, there is no gloom in this room.” I said how can I sign up, get involved, become a RE agent. His answer set me back... “There is no room on this boat my dear friend, you’re best to stay put, you’ll be saved. And with that he turn around and scurried away. Then it happened! With a leap into the air and a quick twist of his small hips and tight buttocks, he tap his beautiful freshly polished black shoes together. It made me smile and I thought to myself, now there’s a man to be admired.

...housing talk exhaustion. The fuse has been lit. Time to take cover and wait.

Does this unsubstantiated comment have as much credibility as your comment on 21st Mar "Shares just correct instantly, housing will follow like night follows day".
Your comment suggests a renter; you just keep renting. Your landlord loves you.

..then you are presumtuously stupid!


..wrong I own - outright. And more than that. And yes, night does follow day.
Your tennant hates you - as do I, as do most young people and the many tax payers and savers who are supporting you.
Please get back on you back slapping investor site.

Good on you then.
However your comments are seemingly just wild guesses - your March comment was wild, unsubstantiated, inconsistent with respected commentators, and alarmist and very, very clearly wrong - like many of your other posts which I can recall - so a very significant hit to your credibility.
How about providing some substantiated comments rather than wild guesses.

Rastus, hating others doesn't improve you life or well being, it's a waste of time. You will be amazed how much your life improves once you let go of this wasteful, negative hate

Also it's sad that a post that says
"Your tennant hates you - as do I, as do most young people"
gets so many thumbs up, pretty low class


The life blood of is being sucked out of our young by the landlording class. It's causing major social unrest, economic decline, rundown houses and suburbs and the destruction of our once decent society.
So yes, there is plenty of hate out there for landlords.

Let's assume you are right on every single point you make above, how is hating landlords going to make your own life better?


Darklords eh Yvil...darklords. They won't get any sympathy from me. If landlords think they can take peoples weekly income in the form of rent, while actively outbidding those same group of people at auctions as they attempt to buy their own home, while voting for policies that further push home ownership out of reach for them - well in many respects its a form of oppression. In the past people have chopped off the heads of oppressors for similarly narcissistic attitudes and behaviors - so a few thumbs up on a web page isn't really that bad is it?

Not sure why - but many landlord property investor types appear to fit the traits of narcissistic personality disorder. Look at the comments on websites like this and on the property investor pages on facebook. I've talked and interacted with thousands of them and there are some reoccurring themes, many are here (of course I've come across some lovely landlords as well so there are exceptions):

Right on IO, now imagine having your land taken from you.

For sure - European settlers have a lot to answer for (no argument there). Although without that, we wouldn't even be having this conversation. Nor would Te Kooti know what a property investment is. Kaitiakitanga. He would be a guardian of the land, not selling it to the highest bidder with a Chinese sounding name nor expecting a Crown entity, such as a Reserve Bank to drop interest rates to make him richer.

Agree though, the Crown has fucked things up for native people all around the world who in many respects were probably much wiser than their pakeha invaders. They may not have had the wheel, but at least they knew more about sustainability and caring for the land (for the most part).

These sorts of claims are tiresome. Every culture on planet earth has had 'their land taken from them'. What do you propose to do? Should we send the Spanish decedent's back from South America? Arabs from Egypt? Norman's (French) from England? Seriously, what do you suggest? Or should we actually just get on with our lives and try to understand each other with love and compassion?

His secret is probably that he supported Nationals plan to sell as much of NZ to foreigners as possible so that land owners can become wealthy.

I have never voted for National ever, not once. I'm not a banker either. You're embarrassing yourself with your lazy remarks.

Ngrrk, I don't want anything except a little empathy and an open mind. Unlike other first nation people we were astute enough enough to negotiate and sign a legally binding agreement with the Crown ensuring our rights- that is all we (the majority anyway) ask for. I only ever raise this to contrast the complaining about high house prices and immigration.

". If landlords think they can take peoples weekly income in the form of rent, while actively outbidding those same group of people at auctions as they attempt to buy their own home..."

Wrong, wrong, triple wrong.. you ever heard of 'purpose built investment flats'. These were very popular in the 1960s and 1970s so there is a precedent for landlords and renters which has not resulted in the social Armageddon you talk about. PBIF can not be owned by occupiers, ONLY investors..

Are you saying we should limit investor activity to PBIF only?

Sounds reasonable.

You have missed that there are tens of thousands of homes under that category. Making out that all landlords are buying the homes that fhb would buy is wrong

Wrong because it makes you feel uncomfortable? Oh I’m sorry

Wow, big Kahunas


A number of my mates have rushed into buying mediocre properties at eye-watering levels of debt that will take big bites out of their paychecks for decades to come.

I see this as thousands of households placing bets with large sums of borrowed money on future governments failing to sort out our housing woes.

I don't blame them: one side has no political will to address the real issues and the other has vested interests in fueling it rather than fixing it!

And ALL sides are aided and abetted by.....'free' money. And who is responsible for that, may I ask? ( a rhetorical question, of course!)

What is this “free” money????
Serious question.

"Rush to buy mediocre properties"

Soul destroying
Have just completed my weekly trawl through Barfoot & Thompson auction results
The stuff on offer is mostly rubbish
How anyone can buy this stuff with a view to making a home beats me

The problem is we all can't have the quarter-acre dream. If anyone thinks they need a 3-4 bedroom home starting out are also part of the problem. The place I live in is only 2 bedrooms with a courtyard. I don't need a yard or office/second lounge. I picked it due to the lower mortgage and proximity to the city. Why pay for space you don't need/use.

If you're starting out at 25, you probably dont need a 3 bed home. But if you're 'starting out' at 35 it's a bit different.

Depends on your needs
Are you under 30 years of age
Are you single or married, or in a committed relationship
Do you have children
Schooling considerations?

Everything below an acre and highest building standards that can be consider as mediocre based on the current asking prices.


"Irrational Exhuberance" comes to mind

Rent prices increasing, interest costs falling. That is a pretty strong carrot and stick at work to motivate as many people as possible to buy their own house.

I bought my house at the start of this year, just before Covid really kicked in.
At the time I was allowing for an interest rate of around 4%, and now we are not too far off my interest rate being 2%. Meanwhile rents in my area are probably up another $50/week or more.

Rents have been falling for most part of the year since there's been a rent freeze in place, where do you get this data from?

The reference you quote just notes a rent freeze for existing tenants.
MBIE is best source of data on rent trends based on rent notification with bonds lodged for new tenancies.
There are seasonal fluctuations but MBIE rent data for new tenancies show for most regions are up $20 YOY - so not sure where you get your data to assert otherwise.
Usually existing rents tend to lag with landlords not putting rents up for existing tenants to the full extent of increases - so JustAFarmer having to pay an additional $50 from that previously for a new tenancy depending on the nature of the property is probably realistic.
Refer "Mean rents by region [CSV, 26 KB]" -

The same data you quote shows falling prices as I said in a number of regions including Auckland and Wellington. Conveniently you placed your anchor a year ago way before COVID hit the economy.

Check things out here:

Auckland Central with all the apartments and no foreign students has taken a bit of a hammering but everywhere else in Auckland, including non apartment Central Auckland has gone up recently. Manukau looks quite bad.

Re “anchoring “ data YOY
When considering rental data it is best to consider YOY rather than monthly as there is “seasonal variation” in rent due to time of year and weather.
A classic example is university accommodation such as in Dunedin and Wellington - there is considerable competition in December-January and rent inflation but any students wanting to get out mid-winter on a lease or find a new flat mate will find a dearth of tenants wanting to take the lease over or move in. To confirm just ask any uni student.
From experience, generally a good time to let is February/March. Prospective tenants are generally not looking just prior to Christmas but come the early new year, starting new jobs, shifting locations and better weather means lots of demand whereas mid winter most are less inclined to shift.
Letting in Covid lockdown Level 4 was abnormal by any measure.
You will note “seasonal variation” in the data, hence YOY is a far more reliable measure rather than monthly movements.
Exactly the same with property sales - spring recognised as the best time to sell due to weather (amazing how the garden and lawn looks can affect the price!) and market turnover and prices reflect this.

JaF, I imagine you're pretty happy now you didn't listen to all the people saying house prices are about to tank (like bw and many, many others on this site) and telling you not to buy?

JaF good on you getting a first home. Its turned out better than expected but I can imagine when covid hit you were quite concerned about house values

Stupid money entering the housing market at the top of the bubble. Perfect recipe for disaster.
I wish there was some media outlet educating FHB about making good informed financial decisions the opposite way the NZHerald does.


For over 10 years I've used solid economic rational for staying out of the market, it's been crazy expensive for a long time and interest rates would normally have gone up well before now in any other economic cycle. This time is different and I wish I'd just followed the herd. Thankfully at least I invested in stocks instead during this time but didn't use any of the banks money. FHB would be silly not to buy now with all the tricks that the reserve bank is getting up to which are specifically designed to boost property prices.

I don't think it was their intent to 'boost property prices'. I think it was their intent to prevent debt defaults and a significant fall in prices that would make our banks insolvent.

Exactly, this is a side effect of the temporary LVR restrictions removal, little to do with low rates since those have been in historic minimums for quite some time already. The problem most ignore is that there are just as many buyers willing to over leverage themselves for buying a property that is not worth the money sellers are intended to get from it.

b21, what makes you think this is the top? Do you mean the same top people have been talking about for the last 10- 20 years? Interest rates are going down further next year, I don't think now is the top at all, not by a long shot. (I'm not saying it's right or good that house prices are this expensive, I'm just acknowledging reality)

What happens when we hit zero?

Will it be like an atom hitting zero kelvin and everything stops?

0.25% mortgage amortised over 30, 40, 50 years, nah, lets just skip straight to 75years, pass the mortgage and the house on to the kids.

Legislate that Mortgage Debt and the house behind it is carried over as part of the will. 5 kids split the ownership and mortgage payments 5 ways.

I can see it now, rampant reverse mortgaging in the twilight years to leave a house for the kids at maximum LVR.

". . . figures from property data company CoreLogic, show that first home buyers accounted for 25% of all residential property sales . . "
The 25% of sales to FHB seems not only very high but inconsistent with RBNZ mortgage data which for August is 12% FHB, 70% owner occupied, 16.5% investor and 1% business. The owner occupier data (less than 50%) - which I earlier queried earlier as being very surprising - seems at odds with RBNZ data (70%) which I feel seems more realistic.
Although CoreLogic data will be over a three month period and RBNZ one month, there is nothing in RBNZ monthly data to show any significant change to account for the difference.
Are agents misreporting sales data? My son (33 years) bought a second property recently and the report by the agent on the auction was that it was pleasing to see it go to a FHB.
I doubt banks have a vested interest in misreporting - especially that for FHB - mortgage data.

Hi Printer8, I'm not sure what RBNZ figures you are referencing, but when I last looked at it FHB's had a market share of around 20%. You can check that out here. A key difference between the RBNZ figures and CoreLogic figures is that RBNZ market share figures are based on the dollar value of new lending while CoreLogic's figures are based on a % of property sales. Cheers. Greg.

Hi Greg
I presume that we are referring to the same original data as a basis, RBNZ hc31 - rather than the article.
Note that E1-E5 (columns T to X) has the absolute/raw NUMBER of borrowers, and is not related to the dollar value (note units at top - "no." not "$" as for other columns).
CoreLogic is referring to the NUMBER of sales.
I stand by the data I presented.
That was calculated from the NUMBER of borrowers for August being 23,844 total mortgages; 28884 FHB, 16,785 OO, 3935 Investors, and 240 business.
Please let me know if this is incorrect.
I accept that CoreLogic data relates to all sales (over a three month period) whereas RBNZ relates to only those sales with mortgages - however, fewer FHB will have no mortgages so if anything RBNZ figures over reflect level of FHB activity.
Note: I did a quick spreadsheet calculation on RBNZ data for one month only (August) due to laziness!

A further point on this; I find the NUMBER of mortgages a far better measure of investor type activity rather than the mortgage value share that you use as a basis in most articles as not all borrower types will be buying the same value properties which will weight activity differently and comparing month to month value as you do is influenced by market movements.
I have previously suggested that NUMBER of mortgages rather than share of value of mortgages is a better reflection of the activity (number) of different buyer types.

Thanks Printer8. Although both of our numbers are correct, you make a good point. I'll review the data we use to see if we can incorporate some of the numbers you have suggested and see where that takes us. Cheers.

Thanks Greg.

And of course, there's always the unexpected!

ACC sends out $106m of bills to self-employed as Covid 'grace period' ends.
Some people who have long ceased being self-employed – either because they have become employees or because they have ended their ventures and become unemployed – will now have ACC bills to pay.

House prices may be heading skywards once again but first home buyers are getting into their own homes in record numbers.

FHB are buying by strecing beyond under FOMO though interest rates are low but DEBT is much more due to rising house price and is based as indication given by RBNZ that will remain low for years to come and many investors are taking advantage of low interest rate and going for interedt only loan which reduces a mortage of 1.2 million for just 550 per week. Everyone is leveraging in hope that this ponzi keeps moving and now more confidence that it will as RBNZ has itself confirmed by going public.

I suspect there is a significant amount of FOMO and panic buying occurring.

Great that more first home buyers are able to get on the market, however RBNZ needs to reintroduce LVR restrictions for investors ASAP to put the brakes on current rampant house price inflation (a contributor to inequality growth)

I agree. With low mortgage rates and many FHB's saving more during COVID-19, it's not like there's going to be much of a dip in the market if investors were excluded. However, I've already noted that in this situation sellers may just delay until those restrictions are lifted, as investors tend to make better offers. At the end of the day, FHB's are just going to have to go with <20% equity if the bank allows.

Just started reading The Price of Tomorrow by Jeff Booth. Deflation heading our way. High debt levels along with salary decreases won’t be inflated away during deflationary periods. Central banks and governments are paranoid about us entering a period of deflation hence all the chatter about inflation. Will be interesting to see how this thesis plays out.

Maybe existing home owners are sitting tight because they already drew down against their capital gains to buy a nice car or boat, so no longer have enough to cover the 20% of their next place, which now costs 70% more than what they would have paid a decade ago?