First home buyers' market share tops list in December
CoreLogic chief economist Kelvin Davidson said first home buyers were the biggest property market success story of 2023, with an overall 25.8 percent of the housing market last year, which was well up on the 2021 peak of 23 percent.
It was the first they had ever out-bought other buyer groups, Davidson said.
"There are a number of reasons for their relative resilience, but key factors include access to KiwiSaver to boost the deposit, a willingness to compromise on location or property type, the ability to tap the low deposit lending speed limits at the banks, and less competition from other buyer groups."
First home buyers made about 17,000 property purchases last year, compared with 14,500 purchases in 2022.
Mortgaged multiple property owners, including investors had a quiet 2023 - with about 14,000 purchases or 21 percent of the annual activity - the lowest on record.
Davidson said it was not surprising investors' purchasing activity had softened, with loan-to-value ratio restrictions, low gross rental yields, high mortgage interest rates high, and interest deductibility rules still in place.
"That said, their market share has just started to edge higher in the past month or two, so they're definitely a buyer group to watch as the market enters a new cycle," he said.
"As property tax changes kick in with deductibility restored to 80 percent from 1 April, it will be interesting to see how investors' demand responds."
Relocating owner-occupiers (movers) were also relatively quiet compared to past standards, with just 25 percent of activity over the fourth quarter of 2023.
"Looking ahead, the overall property recovery is set to continue in 2024, but could be a little underwhelming, given still-high mortgage rates and the prospect of caps on debt-to-income ratios later in the year," Davidson said.