Advice from Rapson Loans and Finance co-owners Tristan Hewett and Brooke Reynolds.
Banks offer up to $5000 cashback incentive to first-home buyers
First-home buyer numbers jump by 3700 in 12 months
Families look for shared ownership to help children on to the property ladder
Never mind The Block - more cash-strapped first-home buyers are spurning doer-uppers to seek homes with “everything done... or no issues”, a Tauranga agent says.
Tall Poppy Real Estate Tauranga owner Janet O’Shea said she believed that could be due to tougher lending restrictions for homes that required more thanminor renovations.
“Buying something you can fix over time has always been a great starting point for younger buyers but structural or consent issues are now factors in finance deals falling apart, and limiting options for buyers.”
Her comments come as national data shows more first-home buyers are getting on the property ladder with banks offering mortgage cashbacks of up to $5000.
O’Shea said an example of how tough it was for young people to save a deposit was a professional Tauranga couple in their 30s, who lived with family for nine years before buying their first home.
She said the cost of living was “very expensive in Tauranga”.
First-home buyers now tended to be older and some parents were co-owning homes with their children.
“I’ve got one on the market at the moment, which is a four-bedroom property in the mid $900,000[s], and I’ve had a family come to look at that would make a good investment long-term. Their son could live in that [and] they would have a shared ownership, you know, with him so we are seeing a little bit of that as well,” O’Shea said.
Jones said buyers were contemplating if they could afford to service the debt but there were incentives, including Kāinga Ora’s first-home loan scheme and KiwiSaver.
Tremains Bay of Plenty managing director Anton Jones. Photo / George Novak
House prices had also fallen.
”It is a good time to be looking as the investors aren’t in the market too much.”
Bayleys and EVES Realty Waikato/Bay of Plenty/Taranaki chief executive Heath Young.
Heath Young, Bayleys and EVES Realty Waikato/Bay of Plenty/Taranaki chief executive, said for the past four months there had been more sales and new listings. Auction numbers had also improved.
Young agreed first-home buyers had been active due to less investor competition.
“It is still a great time for first-home buyers, although upcoming changes in the bright-line test and interest rate deductability will mean a return to the market for investors, which will mean more competition for first-home buyers.
“The property market has already shown subtle signs of improvement and will tend to show greater activity with some of the introduced government changes, along with a softening of interest rates.”
Brooke Reynolds, Rapson Loans and Finance financial adviser and co-owner, said its first-home buyers clients were aged from 18 to 62.
Rapson Loans and Finance co-owner Brooke Reynolds. Photo / Alex Cairns
“First-home buyers are buying a house with a friend or work colleague who also wants to get on to the housing ladder and they are still taking on multiple flatmates to increase their income,” Reynolds said.
The banks also viewed debt differently. Short-term debt was viewed less favourably as it showed instead of saving, the person had spent money. However, a student loan was not considered bad debt, as it was spent to increase knowledge and potential income.
Banks offer big cash incentives to lure first-home buyers
An ANZ spokeswoman said last year it had 9,400 first-home buyers compared to 7,500 in the year before.
Their average age was 35 and about 75 per cent took a fixed home loan.
“Lenders are required by law to capture and check specific information about a customer’s income and expenses before granting them credit. This can include debt owed on credit cards and Buy-Now, Pay-later schemes.”
First-home buyers could qualify for a $5000 cash contribution.
Helen Ryder, Westpac NZ consumer banking and wealth acting general manager, said it held first-home buyer seminars about alternative ways to get on the property ladder, including Kāinga Ora’s first home loan scheme.
Mortgage applications were assessed case-by-case.
“This means assessing incomings and outgoings, which may include debt repayments, student loans and credit cards.
First-home buyers with a home loan of $250,000 or more might be eligible for a $3,000-plus cash contribution.
Kiwibank home lending general manager Nicole Pervan said its home lending grew 2.7 times faster than the market.
Co-ownership was an alternative option where friends and family could team up to get on the property ladder sooner. It also had a partnership with Kāinga Ora that provided access to home loans with a 5 per cent deposit and cashback offers.
BNZ head of consumer lending Sarah Falanitule said it had not changed its lending criteria for properties requiring remediation or renovation.
“We continue to apply standard affordability requirements to ensure our customers can manage both the purchase and any necessary repairs.”
BNZ had a $3000 cashback incentive for first-home buyers, applicable on a minimum lending amount of $300,000 if they met criteria, she said.
By the numbers
Reserve Bank data shows there were 26,727 first-home buyers nationally in the 12 months to January compared to 23,024 in the prior period.
Those first-home buyers collectively borrowed $14,859,000 million compared to $13,170,000m the 12 months before.
In 2024, January first-home buyers made up 24.1 per cent of new mortgage commitments,up from 23.1 per cent in January 2023.
According to the OneRoof House Price Report at the end of January, the average property value of a house in Tauranga was $1.09m and Rotorua was $746,000.
Carmen Hallis a news director for the Bay of Plenty Times and Rotorua Daily Post, covering business and general news. She has been a Voyager Media Awards winner and a journalist for 25 years.
