First-home sales highest in a decade

Despite tough conditions, more than 20 per cent of this year's property sales were to first-home buyers. Photo / Stock

Innovation and lowered expectations among first-home buyers have seen their rates of purchase reach the highest point in a decade - even while prices remain high.

Despite the tougher lending conditions in a still expensive market, first-home buyers took almost a quarter of all sales this year.

Property analytics company CoreLogic's latest market reported showed 21.6 per cent of buyers had bought their first property.

Head of research Nick Goodall said in spite of the tougher lending conditions, first-home buyers had not been as affected as other groups in the property market.

"They're finding a way in the market by readjusting their expectations on property location and type, while others can't (or won't).

"As a result first home-buyers' market share has actually increased."

The report showed over the long term there had been a decrease in the sales to owners of multiple properties, but in the past quarter it had risen 39 per cent.

However, overall sales were still sluggish and annual value growth continued to ease.

In the past year New Zealand experienced its lowest rate growth in property value since August 2012 - up $26,649 (4.3 per cent) to an average value of $646,378 in the year to September.

In Auckland growth was $3846 (up 0.8 per cent) to an average value of $1.04m.

Meanwhile sales volumes were down 25 per cent from 8400 sales in September last year to 6300 this September.

Goodall expected this trend to continue.

"Based on current market activity, we expect October's sales volumes will remain low, following on from an already-weak September.

"The prolonged coalition discussions stalled market activity in October and with the new Government proposing further scrutiny on property speculators it's unlikely we'll see a lift in activity in the short term."

He said property investors were already affected by tightening credit conditions, stricter LVR restrictions and previously rising property values reducing rental yield.

But Goodall expected the plans by the new Government to further restrict foreign buyers on the market would not lead to a mass exodus of investors from the market.

"Changes will take some time to be implemented and the outlook for the economy is relatively good."

The CoreLogic report also showed residential real estate remained by far the largest asset class, totalling $1.04 trillion, with $243 billion of this in home loans.

Commercial and industrial real estate came in at $167b, followed by NZ-listed stocks at $130b and NZ Super and KiwiSaver at $68.8b.