The amount first home buyers are paying for a home reached its highest level in two years last month but the amount of debt they are taking on to fund their purchases is also rising steadily.
Interest.co.nz estimates that the average price paid by first home buyers in June was $682,000, up by $9000 (1.3%) compared to May and up by $21,000 (3.2%) compared to June last year.
That was the highest estimated average price paid by first home buyers in any month of the year since June 2023, but was still 5% lower than the record of $718,000 estimated average first home buyer price set in April 2022.
However the amount of debt they are taking on to fund those purchases is also rising and much of it is in the form of higher risk, low equity mortgages.
Based on the latest Reserve Bank figures, the average size of the mortgages approved to first home buyers in June was $575,265, up by $23,101 (+4.2%) compared to June last year.
That was the highest average mortgage size for first home buyers since September 2022.
Of the 2644 mortgages approved to first home buyers in June, 1106 (41.8%) were low equity loans, where the borrower has less than a 20% deposit.
That level of low equity lending to first home buyers was barely changed from the record 41.9% of low equity loans made in May, suggesting low equity lending to first home buyers is persisting at or near record levels.
The average size of the low equity loans approved to first home buyers in June was $642,857, while the average mortgage amount approved to buyers with at least a 20% deposit was $526,658.
13 Comments
Lambs to the slaughter.
They are paying $200,000 to $300,000 too much, at the bare bones bottom of the ratbox housing market.
It would pay to wait to bottom of this crashing NZ housing market in 2027/2028, where they just may just get this reasonably lower price, as the market crash bottoms and flatlines for a decade.
This crash period sounds like it'll be a mint time to just even survive.
Unemployment about 25% or so you reckon?
Wait for it...
https://www.rnz.co.nz/news/chinese/567864/construction-firms-offering-l…
Now, if land prices weren't also reflecting councils artificially created scarcity & extravagant development contributions...
50% off newbuilds sounds just great. Bring it!!
50% off newbuilds sounds just great.
Not great for a nation that relies on property prices to be 50% higher over the past 4-5 years.
The only reason we needed to rely on high property pricing is because urban land is too high cost in Auckland.
Auckland was a city built on an isthmus which means land becomes much more available as the city expands beyond the isthmus. Unfortunately Auckland City Council is committed to defying this reality at all costs.
Useful insight in the RNZ article. All the anecdotal and industry evidence is consistent with Lord Key being so spooked.
The Ponzi cheerleaders are likely to think it's irrelevant.
Amid the sharp rise in closures, some Chinese construction firms had resorted in cutting quote prices and squeezing already tight margins to stay in business.
Ummmm..what is Chinese construction firm?
I hope it wasn't decided based on names....you know how that is viewed in culturally terrified at upsetting anyone awateaarrower.
Jeez…love the bold statements big G, that call of $682K becoming $382K over the next 24 months is a bit keen…I’ll take some of the action if you’ll wager a mince n cheese on that outcome? 🤝🤝
Wow, you're quite the clairvoyant. Can you tell me what the lotto numbers will be this weekend?
That's a lot of money. However, it buys an asset that, in 10-12 years time, will likely have doubled in value. Houses always seem expensive at the time of purchase, but zoom out a decade or so and they look like a real bargain.
See you been to one of the Ashley Churchless Oneroof sponsored "keep the ponzi-a-going events"? Apparently they are giving away tickets now, and the joint is still almost deserted.
Glad to see your taking up a row.
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