The number of first home buyers getting into a home of their own is on the rise. But the average price they're paying, and the amount they're borrowing, are declining.
Interest.co.nz estimates the average price paid by first home buyers was $656,019 in May this year, compared to the market peak of $717,724 in April 2022.
That means on average first home buyers were paying $61,705 less to get into their own home in May this year than at the top of the market just over two years ago.
There has also been a corresponding decrease in the average amount they're borrowing over that time.
According to Reserve Bank lending figures, the average size of mortgages approved for first home buyers when their prices peaked in April 2022 was $592,299. By May this year that had dropped to $548,148, reducing the average size of their mortgage by $44,151 (-7.5%).
Over the same period, the number of mortgages approved for first home buyers has jumped from 1766 in April 2022 to 2700 in May this year.
However, there has also been a jump in the number of first home buyers purchasing their first home with less than a 20% deposit.
At the market peak in April 2022, just 412 (23.3%) of the mortgages approved to first home buyers were higher risk, low equity loans.
In May 2024 that number had more than doubled to 909 (33.7%).
So the number of first home buyers with less than a 20% deposit has risen from roughly a quarter to a third over the last two and a bit years.
So to summarise, over the 25 months to May this year, more prospective first home buyers were getting into their home, and on average they paid significantly less to do so and were also borrowing less.
But more of them, both in terms of their absolute numbers and the percentage of buyers, were buying with less than a 20% deposit and were taking out higher risk, low equity mortgages to seal the deal.
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