First home buyers are a growing influence — even in markets previously dominated by investors, such as Auckland, they are holding their own in suburban and rural centres, away from the bright lights of our main cities.
According to Core Logic Buyer Classification data, first-timers account for 36 per cent of buyers in Hutt City and Porirua City — some of the highest percentages in the country. In rural South Waikato and Ashburton, first home buyers account for 33 and 31 per cent respectively.
So what's driving their growing influence in the regions?
With many struggling to save a deposit, a good portion are capitalising on the Government's kick-start packages — the KiwiSaver HomeStart grant and savings withdrawal scheme.
The HomeStart grant package is driving demand for regional properties due to its "caps".
For example, these packages can only be applied to existing properties valued at $400,000-$600,000 (dependent on your location). The cap is more for new builds — in the range of $450,000-$650,000.
As you can imagine, given the value growth in our cities, these caps are contributing to demand for property, particularly new builds, away from our main centres.
What should first home buyers consider when purchasing their first property?
Something worth looking into is a land and build package. In the Wellington region, Wainuiomata — previously a peripheral suburb with limited recent development — is proving popular.
A key benefit is that these property packages often require a smaller deposit. As new builds often sit outside reserve bank LVR restrictions, buyers can access deposits for as low as 5 per cent with some developers.
This is not only opening the door for many, but proving beneficial for suburbs that may have previously struggled to attract aspirational millennials such as those wanting their dream home from day one, or young families wanting a warm, dry home.
Do you buy new or renovate an existing house?
With a new build, there are the benefits such as full insulation, double glazing, fixed heating sources and often developer guarantees on many of your construction features.
Compare this to an older home which may require renovation and modernisation — such as a single-glazed and uninsulated home.
A great benefit of renovating an older home is the property's character is kept intact. You'll also get to improve and use your DIY skills.
Aside from the pros and cons debate, it's great to see a higher portion of new buyers enter the market.