Low house prices and deposits help first home buyers

New Zealand Mortgages says five out of 10 mortgages it has written recently have been for first home buyers (FHBs) with just a 5% deposit.

CoreLogic says FHBs are taking full advantage of lower property prices, the availability of low-deposit finance, opportunities to tap into KiwiSaver funds and reduced competition from other buyers.

Low equity loans to first home buyers have been at about 30% since the middle of last year. Their number peaked at just over 40% in May 2020.

CoreLogic’s biannual First Home Buyer Report shows FHBs accounted for 26% of purchases in the first quarter of this year, well above the long-term average of 21%.