First home buyers' share of housing sales slipped to just under a quarter in January, according to property data company CoreLogic.
It says first home buyers' share of total housing sales dropped to 24% in January from 26% at the end of last year, however there were regional differences, with first home buyers showing declines in market share in Auckland, Wellington and Christchurch and increases in market share in Tauranga and Dunedin.
That means first home buyers and mortgaged investors are now equal in terms of market share, with the share of sales to investors needing a mortgage to purchase a property remaining steady at 24% of sales since the middle of last year, down from almost 30% at the beginning of last year.
So between them, first home buyers and mortgaged investors currently make up just a tad under half of all residential property sales.
Investors not needing a mortgage and paying cash accounted for 12% of sales in January.
CoreLogic's Chief Property Economist Kelvin Davidson said tightened loan-to-value ratio restrictions for owner-occupiers that came into effect on November 1, and changes to the Credit Contracts and Consumer Finance Act from December 1, were already affecting the market.
"It's difficult to disentangle the two influences, but what is clear is that new buyers are being hampered by tighter credit policies," he said.
"We've been expecting relocating owner-occupiers or movers to also increase their market share this year, as the rise in listings starts to give them more choice.
"Recently they been renovating not relocating because low stock on the market meant they couldn't find their ideal next property.
"This was indeed a feature of January's data, with movers' market share rising from 27% in late 2021 to 30% in January."
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109 Comments
Looks like the government's half-baked CCCFA has killed the dreams of many aspiring FHBs.
There won't be many FHBs left and dreams of having your own home to house your family is slipping away fast.
As expected, cash buyers rule (I'll save the 'I told you so' for some other day).
If you're a FHB and still able to,
BE QUICK!
FHBs I know in Wellington (skilled, early 30s, decent wages) are making their escape this year. Myself included. CCCFA has nothing to do with it.
The only thing we want to be quicker at is leaving.
Northman, what is stopping you from leaving now?
I have commitments keeping me here until September, mostly work related, which is when we'll be leaving.
I wish you good luck, OZ?
I saw your posts and you seem to be a person with a balanced view, but this comment change my view.
Who are you to ask someone when they will leave, at least maintain some decency.
That's because you assume my comment was cynical, it's not.
"I want to leave quicker"
"why can't you leave now?",
There's no problem with that question, it's constructive, by answering this question (to him/herself or in public) he/she might find a way to achieve what he/she wants earlier, being "leave quicker"
Just a case of lost in translation I think.
It's all good. I assumed your comment was coming from a place of curiosity and not malice, as I've always found your comments to be reasonable.
Thanks Northman
As you say, good on them for their initiative.
But isn't it a bit sad that more and more kiwis are effectively being 'forced' into this 'choice'?
We're in that situation. Been in Australia for three years now.
It was always our intent to do five years and return. This is looking increasingly unlikely.
I think it's pretty common.
Better hurry to get to Australia- because if Labor get in come May then like most left-wing Govts they’ll close the borders!
Exactly. Prices are simply too high in Welly now. A 30% increase in 12 months is the problem.
Leaving to where?
I know 5 families in 30's all well paid in highly qualified jobs have already left in last couple of years, one of them just left yesterday and moved to Aus.
Exodus is on the cards, a sensible youth will never live in a place where he has to pay 1.3 mill for an average house with an average income. NO POINT
Jacinda is doing wonders for this country, in the next 5 years, the percentage of people on subsidies/ handouts will increase disproportionately.
Jacinda has spent 2 years keeping people out of the country, she will have the team working on how to keep people in this country.
One word from your paragraph summarizes the main issue: Jacinda
-7
-100
Same here, we looking to leave to Aussie later in the year. Also my cousins. Makes no sense here anymore, higher costs, lower wages.
Our neighbour has just left for Denmark (job in science). Three young families we know are leaving in the next few months: to Asia, Europe and Australia. House prices, although important, are only one reason. The world is going back to normal and people are moving on with their lives. They are all renting. The relative difficulty of buying a house resulting in a looser connection with the community is what makes going away a lot easier. Having said that, there will probably be many new families drawn by immigration ads, who will take their place.
I'm leaving too, my wife is French, we are moving to Lyon. (I've lived in Wellington most of my life)
please stay, we need more French ppl here.
Lyon - nice city, nice food: well done
A vast upgrade to the quality of ski resorts on your doorstep.
“FHBs I know in Wellington (skilled, early 30s, decent wages) are making their escape this year. Myself included. CCCFA has nothing to do with it.
The only thing we want to be quicker at is leaving.”
Fair enough, just think through it and make sure you don’t come back in 10-20 years regretting the decision, seen way too many people done that. Grass is always greener on the other side….
True. I'd always recommend doing your research and do what is right for you. You've got to take some risks in life though, and it's a risk worth taking when you're young.
For me personally, as I'm not Kiwi by birth (British) and all my family/network are back in England, its probably a greater risk staying put for us.
Haha yeah. It's all the CCCFA's fault...
Honk honk 🤡🤡
The more people who sell up and leave NZ, the more houses available for those who remain here.
That should bring house prices down a bit, ceteris paribus. Good!
TTP
The people who are leaving from the sounds of it aren't the asset owners though. So at most the impact would be on the rental market yield, but doubtful to be on the house prices themselves.
.....and all you'll be left with "taking the proverbial" are retirees, immigrants, beneficiaries and real estate agents .....how terribly exciting ! :)
Never going to happen.
For every kiwi the government drives out they have another ten from less developed countries lined up to work for remittance.
Exactly - there is an ocean of hopefuls out there and a tiny proportion thinking NZ is it for them will greatly outweigh a few tens of thousands leaving. When asset prices just start to tank, the temptation to fill up rentals and deflate wages will be impossible for any plausible NZ govt to resist. The collapse has years to play out - it's barely started.
Along with high interest rates coming, NZD tumbling, just so many reasons for this housing market to crash.
Looks like the government's half-baked CCCFA has killed the dreams of many aspiring specuvestors.
There won't be many FHBs left in NZ and dreams of flogging off a horrendously overpriced damp shed to a desperate young family who will be left holding the bag is slipping away fast.
As expected, harsh reality will soon catch up with NZ's housing bubble (I'll save the 'I told you so' for some other day).
If you're a greedy specuvestor and still able to sell,
BE QUICK!
Otorhanga is still providing a good deal for the money.
Here's something for about half of what Auckland is going for.
There's almost no ready supply of rentals on the market in the area except for this one.
Assuming $450 weekly is the going rate, that a good 4.5% rental yield!
What are people waiting for?
It'll probably be gone quick.
cool story, bro
Ruatoria also still good value.
Ruatoria: Lots of crayfish and excellent fishing, great surf, good pub, friendly locals last time I was there, great climate with lots of sunshine, excellent air quality, no traffic jams or parking metres . . . some are tempted. After all, I read an article just the other day of a couple who sold up and moved to Karamera (look it up on a map). :)
Jobs?
Really !! ....can you give me the details CWBW !! ......I am foaming at the mouth with this 4.5% gross return ....BE QUICK !!
******************
Disclaimer: owned and rented out 2 properties at 15% and 12% gross return ....great cash flow and when sold 85% & 80% capital gains ....so keep pushing your barrow mate, as it's like fishing isn't it - maybe you'll get that "sucker" that buys or maybe you won't......while I would NOT wanting to be spruiking NZ residential property right now.
a) who TF would want to buy a rental now, given the market and the new rules.
b) who would want to pay over half a million dollars for something in Otorohanga.
c) 4.5% is gross. After expenses and tax the Otorohanga resort roi is pretty mehhhh.
d) Otorohanga. Enough said.
You're straight up delusional coming on here and shilling Otorohanga rentals, but so are many others, so yes it probably will sell soon.
Can't tell if CWBW is confusing Orontogosh with Otorohanga too.
Orontogosh is definitely the better investment.
4.5% gross yield doesn't leave you much after insurance, rates, vacancy and 1-2% for expected maintenance. Probably going backwards if you have a decent sized mortgage.
Plenty of shares on the NZX with similar or higher gross yield, no holding costs and no phone calls because the roof is leaking.
Christ,
Even Otorohonga is more expensive than Brisbane.
I suppose there are pros and cons if you have a very special fondness for cows.
Straya!
Brisbane housing market too hot for even the best to handle
As perfect proof the sizzling heat in Brisbane’s housing market hasn’t cooled, even those with deep inside knowledge are struggling to buy properties, with one company admitting they’ve just lost out on their sixth home at auction in three weeks.
Double-digit growth: Brisbane property prices not slowing down
A property forecast report shows there is still double-digit growth in Brisbane’s property market and it will outstrip Sydney and Melbourne in 2022.
And still half the price of Auckland.
Actually has room for upward valuation.
Be quick!
Half the price of Auckland, and as nice if not nicer city. Quite a bit bigger than Auckland too.
Bloody hot and humid for 5-6 months of the year though, personally I'd struggle with that a bit.
CWBW,
One day you might, just might, post something worthwhile. But probably not. Who gives a toss about the gross yield? Come back with the net yield- after rates and insurance- and then from your great knowledge, an estimate of other costs- maintenance and periods between rentals.
So, a net yield of below 3% seems reasonable-in Otorohanga? Are you taking the p....?
Rubbish. Exactly the type of MSM RE sponsored spew that drives the hole deeper.
Yes rush! Let's rush and get the avg price up to 15 or 20x the national income.
As a nation we threw our 20 somethings under the bus well before the cccfa was introduced.
There should not be a rush. Only sustainable. You and your creed are responsible for the hype.
Looks like equity requirements and no more tax rinsing on existing stock has leveled the playing field.
Just wait a few months 30% to 40% cheaper it could more just depends on interest rates
If you are a FHB and you have a good salary and can afford a mortgage for a newish house, then only go ahead and buy in this market.
Do not ever buy any property which is more than 10 years old, they are all crap and you will keep on spending money on it and never in your life get out of debt cycle.
If you can't afford it, just don't buy. Plan your career in a way where you can move places and increase your salary. If you get stuck with an immovable asset like an house, your career will take a big hit. Invest in REIT rather than your own house. You get the similar kind of gains with flexibility.
For the young I will suggest, move out to the big wide world. There are huge prospects for English speaking well educated kiwis in Asian countries and you get good experience along with a better life style.
Buying a house should only be an option if you get it at a reasonable value. Right now in NZ, it's beyond anything reasonable. The earlier generations, current government and oldie investors with lot of equity have already screwed your options. You can get back to them by moving out and they reap what they sow.
That's a lot of advice NGK, could you please let us know how many houses you have bought and sold and for how many years? It will help with credibility.
Thanks
So in your thinking, credibility only comes by buying and selling? Sometimes i want to laugh on such comments but then my response turns to pity. I don't think i need to explain anymore.
Yes credibility comes from experience. I wouldn't dare give cooking or gardening advice, I know I'm not good at either and I have very little experience in these fields.
If I wanted to learn how to cook better, I would ask an experienced chef
If I wanted to become better in the garden, I would ask a person with lots of experience in gardening.
Do you not agree it's better to listen to someone with experience ?
Yvil, in your experience how much was your first house in NZ and what was your household income at the time?
Be interesting if that experience is significantly different to that faced by young New Zealanders today.
Yes, people getting into home ownership are not necessarily possessing a whole lot of skill and experience, often it's simply being right place / right time.
NZ in 2022 is a very very bad place and time for FHBs.
I don't think i need to explain anymore.
Or could it be that you don't want to answer the question?
How many of those with "experience" called the GFC?
"If you are a FHB" . . . "Do not ever buy any property which is more than 10 years old, they are all crap . . "
This is one of the most ridiculous pieces of advice (amongst a rapidly growing amount) that I have seen on this site. It displays a very high degree of lack of thought and naivety..
The reality is that FHB will be looking at entry priced properties. There are considerable numbers of such lower, older priced properties suitable to FHB to get onto the property ladder . . . . and over the past fifty years it has been the norm for FHB to buy at an entry level and over time then to trade up.
There are a wide range of designs over 10 years that while the dream home are ideal as entry homes for FHB. This includes well maintained ex-State housing built during the fifties and sixties, Keith Hay Homes and Lockwood Homes of the seventies and eighties; these were all well built weather tight homes and, compared to some new builds I saw recently, the quality of materials and workmanship was far superior. They are also more likely to be located closer to the city centres, and have better access to well established facilities which many recent builds don't.
It is ridiculous advice for FHB turn their back on . . . what? . . . 80% of the NZ housing stock and market.
The reality is that FHB need to make compromises when they buy their first home . . . and that has applied for at least fifty years that I am aware of.
As NGK's advice is both ill-founded and naïve and it is not surprising Yvil asked of DYB's experience.
What you say might be true in some cheaper parts of the country, but it's certainly not true in Auckland. Not remotely.
Ex state homes even on half sections are usually north of $1.3 million.
I have seen pretty average 2 bedroom brick and tile units in pretty average locations going for 800-900k in the last few months. You can't seriously think that this is a better option than a new 2 bedroom townhouse at a similar price point.
Further as I note above a big hurdle is deposits. Some FHBs can get approved on 5-10% deposits on new builds, 20% is the minimum on existing houses.
You sound like someone who is very, very out of touch with the realities of FHBs buying homes in 2022, like a few others here....you may be experienced but it doesn't sound particularly relevant to many FHBs in 2022...
HM
Ex-State Houses older than 10 years going for $1.3m suggests that there are people who don't think that all such houses are "crap" as per NGK's blanket assertion.
As to being out of touch; as I have previously posted I have four millennial sons who all have purchased homes and two have a rental (one had five rentals until he sold 4 in 2021) and all done without the help of bank of Mum and Dad. They acknowledge that they have achieved this as a result of consultation with me which they initiated . . . . so please, not out of touch at all.
Yes, I agree it is tough for FHB but NGK's ridiculous blanket advice does not help and needs to be challenged.
Edit: Correction of error. As previously posted, he sold last year - in 2021 not 2020.
Sorry but you really are out of touch, your advice shows it big time, especially your comment that older housing should be the go-to for FHBs over new housing. That's really dated.
Things have a changed - a lot - even since 2020. And the experience of your sons is no guarantee of wider relevance.
I'll put it to you - do you think ALL of them could buy the same properties, at 2022 prices and at 2022 interest rates?
HM
If you want to discuss it get it right.
You twist what I have said; I never said that older houses should be the "go to for FHB". I said that NGK's blanket statement that "all houses older than 10 years old are "crap" and FHB shouldn't touch them is very poor advice . . . one doesn't turn there back on 80% of the market.
As for being out of touch since 2020 that's not correct . . . ironic, as I think you posted you purchased two years ago so are you out of touch?? :)
I bought two years ago, and I bought a new townhouse in Auckland, because it was more affordable for me than any halfway decent existing house. And came with a 10 year Master Build guarantee etc.
And that will be the case for many FHBs, even more so than me as I had a 25% deposit, but FHBs can buy new townhouses with a 5% deposit which makes a new home much more accessible to many FHBs - provided they can afford the mortgage on the balance of course.
So I think I speak from direct experience as a recent FHB and seeing the benefit of buying a new build.
Yes, you didn't say older properties should be the 'go to' for FHBs, but it was quite strongly implied, you have to admit. And it's a really dated opinion, especially in Auckland.
I agree his statement that all older houses are crap is poor - but for FHBs at FHB price points many of them are, and are a poor choice.
But that doesn't mean all new townhouses are great either. But for many FHBs, they are now the only option.
HM
OK
Good to hear about the recent purchase.
You brought new, 2 years ago... tell me how long did it take for the leaky building crisis to come to light and get resolved. How many master builder guarantees actually held water. New buildings in New Zealand is like buying a timebomb. Most are designed to fail early and young. Hence don't expect it to last much longer than a decade before serious issues.
And by the way, there are plenty of properties that are going for crazy high prices that are crap.
That's where things have got to in this crazy bubble.
Speculative mania is fueling it, not rationality.
HM
Yes, it is not hard to argue that the market is currently out of kilter. However, that is no excuse for naïve ridiculous advice.
The don't buy older property doesn't make sense. There are plenty of perfectly good houses that could use a tart up and 90% of NZ is old homes. If people waited and saved until they could afford a modern home with nothing to do they would have been outstripped by market gains in the last few years and would still be waiting and saving.
Invesrmt in REIT and gains will not be lost. They will just be more free to do what they want to do rather than stuck with an immovable asset. They just need options.
Let's not get the young bogged down by your old thinking that there is nothing in life unless you have a house.
Only if our governments were more intelligent and they created an environment in the country where people do not have to fight for houses and worry about where they will live. We would have time to do better things for the country and society.
But pity we collectively didn't think that it is something we should do rather than jumping like a Monkey sitting on a tree when they see snake on the ground. Pandemic the snake and how government jumped with a response. Monkey doesn't understand that they are already on a tree, far far away from the snake. Plan better and effective for the future.
Your advice would push up new home prices further as that is all people would want to buy.
"don't buy older property" is indeed bad advice, you can end up with a much better house by buying an older house, then improving it when you have more funds.
As long as it's older than the 1990s, yes. Probably good advice for young Kiwis to stay clear of 1990s Hardileak houses (which the banks may not want to lend to them for anyway).
There's validity to his view. Much of NZ's housing stock is rubbish and significant maintenance costs is the last thing you need when you are paying exorbitant $ for a house.
Having said that the quality of the build of some of the new housing is questionable.
It's always case by case.
Another potential benefit of new builds for FHBs are the less onerous deposit requirements.
Thanks but I didn't want to explain this to yvil since he is experienced and an expert.
Guess the most experienced in get rich by adding zero value to community.
Some think they achieved something in their life by that. That's what I pity.
by Yvil | 14th Feb 22, 12:53pm
Yes credibility comes from experience. I wouldn't dare give cooking or gardening advice, I know I'm not good at either and I have very little experience in these fields.
If I wanted to learn how to cook better, I would ask an experienced chef
If I wanted to become better in the garden, I would ask a person with lots of experience in gardening.
Do you not agree it's better to listen to someone with experience ?
Instead of being cynical and rude, why don't you reply to my question above?
You mean I have to tell my personal holdings to you on this public forum.
What are you 12?
Last time i checked, this is an adults forum where intelligent discussions happen.
Not being sarcastic, just honest.
NGK
The problem is your wild blanket statement regarding houses more than 10 years old is not "intelligent discussion".
And yes; from your previous posts over considerable time they strongly suggest that you are not an experienced property owner.
And that makes me not able do provide good feedback?
What if i have lived in those old houses and i want to provide good feedback to the ones looking to buy.
Again i pity the thinking because most of you are self centered and probably rich investors in those old properties and not add value to the country or society.
NGK, you are being defensive and aggressive in an attempt to avoid a simple and clear question:
Do you not agree it's better to listen to someone with experience ?
So how about you stop changing the subject and answer the question?
Experience does not always equal good judgement.
See my comment to P8 above, he's experienced but his advice is poor and not relevant to most FHBs in 2022.
I fail to understand the logic that how would me answering that question make any difference.
I ignored it because it didn't make any sense. It's not a question. It's a statement.
You seem to have lost track.
Wow, you're a special kind of character, change the subject continuously to avoid answering a question, blame everyone else, too scared to open up about yourself, constantly complain about everything… how is that working out for you?
We have a few special people on here that are just angry and come here to vent. I guess it makes them feel better but doesn't solve their problems.
I agree. We’ve been through old houses (e.g. old English style villa and 1950s ex-state house) and every time we tried renovating something, it was like opening a can of worms. Strip off the old kitchen to get a new kitchen in - you find the walls & floor aren’t flat due to the old age of the house. Scared to death that the asbestos reports will come back positive. You find someone else’s botched DIY reno that you have to undo etc etc. It’s just not worth it unless you like doing renovations and have the skills. We got ourselves a brand-new house and we are much happier now as we can spend our weekends doing fun things with kids rather than doing endless renos on top of working full-time.
The place we rent is an old house (early 20th century) and it's completely put me off owning an older home. As much as I love the high ceilings and the grand stucco. It's cold, damp and there's constant issues. Every fix is like a can of worms, like you say, because there's over 100 years of lazy patch-up jobs all stacked on top of each other.
There is definitely more risk renovating an older house (as Oasis rightly says) but it's the blanket statements from NGK "Do not ever buy any property which is more than 10 years old" which are dangerous. I dislike blanket statements alltogether, Boomers are… OZ's are… Investors are… RE agents are… They are made by narrow minded people who don't realise that the time when one is born, or the place, or the profession doesn't make everyone the same!
His comment was in the context of FHBs. And in that context, while it is still too much of a blanket statement, he's generally correct in terms of houses that are affordable to FHBs.
Think especially of many of the rubbish apartments and townhouses built between 1995 - 2005.
Brick and tile units can be an OK buy, but many will require quite a lot of renovation and $$$. And why bother when you can get a new place at a similar price? (and a much more accessible deposit)
Blanket characterisations are usually wrong, but not all blanket statements are. Older houses will also usually require more blankets than newer ones.
Oasis
That is great . . . but the blanket statement about all houses over 10 years old are crap does not hold and there will be numerous anecdotal experiences contrary to yours.
I for one have personal experience of three contrary to yours, and I know of numerous others with similar experiences.
I always assumed that if you bought an old bungalow, you kind of accepted it would Creek, leak and be drafty. But that's the appeal, like a grown ups tree house?
Agreed and in ChCh I'd be very wary of purchasing a pre-EQ home as most of these were badly repaired, tarted up and onsold (an engineer's report is essential).
It says first home buyers' share of total housing sales dropped to 24% in January from 26% at the end of last year
CoreLogic's Chief Property Economist Kelvin Davidson said tightened loan-to-value ratio restrictions for owner-occupiers that came into effect on November 1, and changes to the Credit Contracts and Consumer Finance Act from December 1, were already affecting the market.
"It's difficult to disentangle the two influences, but what is clear is that new buyers are being hampered by tighter credit policies," he said.
Lol, is it worth to bring up CCCFA for this 2% drop? Could there be other factors like increasing interest rate, less affordability, cost of living increase in this 2% drop? Just to base on this 2% drop, I don't think it's clear that "new buyers are being hampered by tighter credit policies".
Also,
however there were regional differences, with first home buyers showing declines in market share in Auckland, Wellington and Christchurch and increases in market share in Tauranga and Dunedin.
Clearly, this is an affordability issue...
Exactly, so he has the answer without knowing it.
So is he being sneaky or just poor in his commentary, in not also acknowledging the impacts of high prices (unaffordability affecting demand) and rising interest rates, in addition to CCCFA etc???
They always seem to look first to how they can extract more money out of younger buyers, no matter how bad the problems of house prices get.
Might be a moral problem we're dealing with underneath the policy problems. A boundless sense of entitlement to extract wealth from following generations.
Shouldn't the real story here be that 25% of sales are to mortgaged investors??? I thought they were on the sidelines now. Unless there has been a whole lot of new builds settling?
Good question.
I imagine there will be quite a few new builds settling, although that would also be reflected in FHBs who have been a big part of the new build market.
good news, the less fhb coming in at this over inflated level the better.
How hard can it be to put a temporary stop on investors, who already own say, more than three properties? I'm sure that there are literally thousands of them..
How hard can it be to put a temporary stop on investors, who already own say, more than three properties? I'm sure that there are literally thousands of them..
It would be easy to implement but require political courage, so I think we can forget about this.
In my view anyone who owns more than 2 should be stopped. Why does anyone need more?
Not that they can take it to the heavens with them or in the grave?
What is wrong with you two.
It's government meddling that got us here. More of the same will not solve it.
govts has supported the asset owning class at all cost, that is what got us here.
I'd prefer if they just taxed excess houses. Any house other than your primary residence is taxed, perhaps a deemed return of 5% so you have to pay 1.5-2% of the value in tax each year.
You can buy investment properties, speculate, buy the holiday home, whatever. You just have to pay for the negative externalities.
CCCFA has nothing to do with it.
https://www.interest.co.nz/property/114264/early-criticism-effect-credi…
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