There are good and bad signs for first home buyers as Auckland houses become more affordable but investors jump back into the market and provide increased competition.
City homes were now almost 10 per cent more affordable as falling house prices over the last three months brought them within financial reach of more buyers, Massey University's latest Home Affordability Report found.
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But the bargains were also catching the eye of investors who were now buying more homes as well, a separate report by analysts CoreLogic found.
Nationally, homes had become 2.6 per cent more affordable in the last three months thanks to plateauing house price growth in many regions, rising wages and record low repayment rates on home loans.
Massey report author Arshad Javed - from the university's School of Economics and Finance - said affordability improved in eight of the country's 16 regions.
"Most of this is being driven by house price fluctuations, including in Auckland where the median house price declined by $40,000, resulting in an 8 per cent improvement in affordability," he said.
Massey's finding comes after a near decade of booming house price growth earlier transformed Auckland into one of the world's most unaffordable cities.
National home ownership levels also plummeted from a record high of about 78 per cent in the 1980s to 55 per cent now.
However - with Auckland's house price growth slowing and even beginning to fall in the past two years - first home buyers not only snuck back into the market but became the largest home buying group.
They were helped along by record low interest rates, an ability to put their KiwiSaver savings towards a house deposit and Government measures aimed at reducing the number of properties bought by investors.
Yet that brief period of light for first-home buyers could now be under threat from increased competition with investors, Kelvin Davidson, senior property economist with analysts CoreLogic, said.
"Overall, there have been signs in the past few months that we may now be witnessing the end of the purple patch for first home buyers," he said in CoreLogic's latest Market Pulse.
A key sign was investors were once again taking out the most mortgages for Auckland homes.
They secured 28 per cent of all home loans offered in the last three months, moving ahead of the 27 per cent secured by first home buyers.
Owner occupiers looking to sell their existing property and move into another home have, meanwhile, been retreating from the market.
Known as "movers", they secured just 22 per cent of all Auckland home loans in the last three months, their lowest market share in a decade.
Davidson said investors were buying again because they were getting better rental returns on properties and were now looking at falling prices in Auckland and sensing an opportunity for bargains.
Nationally, movers were the biggest buying group, taking out 26 per cent of new home loans across the country compared to 25 per cent by investors and 24 per cent by first home buyers.
Loan Market mortgage adviser Bruce Patten wasn't ready to call an end on the first home buyer's purple patch.
He said his mortgage brokers had not noticed a particular surge in investors taking out home loans ahead of first home buyers.
Instead there was an overall surge in activity with the arrival of spring as more homes were selling and being listed on the market as for sale.
The trend of affordability over the past three months also continued a broader trend across the last year, according to Massey's affordability report.
Auckland homes had become 13.8 per cent more affordable, it found.
National affordability, meanwhile, had improved by 5.2 per cent. The report argued that a 3.7 per cent jump in national wages and record low interest rates more than offset a $30,000 jump in the national median sales price over the same period.