27 Oct 2017

First home-buyers 'readjusting expectations to get into market'

11:18 am on 27 October 2017

A new property market analysis shows the proportion of people buying their first home has hit a 10-year high.

In September, more than one in five house sales were to first-time buyers; their highest share since 2007.

Head of research at market analyst CoreLogic, Nick Goodall, said despite tougher lending conditions, first-home buyers were finding their way on to the property ladder by readjusting their expectations on location and house type.

"They are adjusting their expectations, potentially moving to areas they otherwise wouldn't have wanted to, and/or looking at different property types, mostly looking at townhouses and things."

Sold sign outside a new house being built in East Auckland

Photo: RNZ / Claire Eastham-Farrelly

However, he said they were not really looking at buying apartments.

Mr Goodall said unlike other buyers they were willing to make those adjustments and sacrifices to get into the market any way they could.

However since housing sales overall had fallen, the figures didn't indicate a flood of new home buyers in the market, he said.

Despite first-home buyers snapping up properties, Mr Goodall said other buyers might be a bit more cautious.

He said prior to, and following, the election house sales dropped.

Mr Goodall said with the new coalition government in power, property investors were braced for more scrutiny.

But he said changes would not be immediate, and he did not anticipate a mass exodus from the market.

"Property investors have been a bit more wary leading into the election .... and now since the government's been finalised property speculators are going to be under the hammer a little bit and maybe very cautious about purchasing."

He said proposed policies from the new government looked like they would affect investors.

On the cooling market, Mr Goodall said he expected house prices may drop, but not by much.

He said the market will continue to cool and will lift again next year.