First home buyer market share reaches record 27%

First home buyers are finding ways to get onto the property ladder, despite challenging conditions.

CoreLogic’s latest First Home Buyer Report found that first home buyers accounted for 26% of all purchases in the first nine months of 2023, compared to a long-term average of 21%. Meanwhile, first home buyer market share reached 27% in the third quarter of the year, which was a record high.

CoreLogic said one reason first home buyers had such high market share right now was that they were operating in a subdued market with a below-average number of transactions, which meant buyer competition was relatively low.

Another reason was that prices had fallen a lot over the past year – the median price paid by first home buyers was $720,000 in 2022 but only $690,000 over the first nine months of 2023.

First home buyers were also able to access the First Home Grant program, use KiwiSaver to fund part of their deposit and were “willing to compromise on location and/or property type,” according to CoreLogic.

How does the future look for first home buyers?

“Overall, then, it’s remained a strong market lately for first home buyers, with many key factors still in their favour. And looking ahead, it wouldn’t be a surprise to see first home buyers continue to hold onto an above-average share of property purchases in the next six to nine months as well,” CoreLogic said.

“However, with the change of government and the slow softening of the tax system for property investors that lies ahead – namely a shorter Brightline Test and the full reinstatement of mortgage interest deductions – first home buyers may not have things all their own way forever. To be fair, we don’t expect a flood of investors coming back to the market, but some will, and this will be extra competition for first home buyers.”

I love helping first home buyers enter the market. Please reach out if you’re thinking about buying a property. I can explain how the process works – particularly around qualifying for a home loan – talk you through the government incentives and manage your loan application.