Nick Goodall: Buying by first-timers up

The general election is claimed to be among the factors slowing the residential property market. Photo / Getty Images

By Nick Goodall

This winter was definitely gloomy for property sales across the country, with activity remaining weak throughout.

Many factors combined to influence the ability and the desire of people to buy property: increased deposit requirements, tighter lending criteria, slightly higher interest rates, a slowdown of Chinese capital, unaffordability and, more recently, the general election.

So, in that challenging buying environment, what types of Auckland property buyers were impacted the most and by how much? To answer that, we look to our buyer classification data, a series which links types of buyers to property types, locations and prices.

August results provide fascinating analysis against the current context of differing housing policies and heated debates.

That uncertain political environment appears to be weighing more heavily on the minds of potential movers than prospective property investors.

Only 21.7 per cent of Auckland sales in August went to people moving between homes, extending the downward trend of sales to this group over the last few years.

The share of sales to multiple property owners remains relatively flat at 41.9 per cent. A large percentage of these purchases aren't tied to a mortgage but this isn't because cash buyers are flooding the market - cash sales have simply remained consistent while overall volumes have dropped.

It's when you turn to first home buyers that things get really interesting. The group that's so often the focus when discussing affordability appears to be doing more than okay.

They're responsible for 23.4 per cent of sales in August, their highest share in almost four years.

This group isn't struggling to get into the Auckland market as much as some would have you believe. But given such high prices, they must be sacrificing something, right?

Well, yes, but it's not exactly a leafy green suburb for the cramped apartment in a concrete jungle type sacrifice.

Since the start of the year, 73 per cent of Auckland's first home buyers have selected houses.

Earlier this decade, the house preference within this group was higher - hovering between 75 and 77 per cent, but the swing has gone to units (or more accurately townhouses), such as in Hobsonville, which are up from 14 to 17 per cent, not apartments.

Apartments only make up about 5 per cent of their purchases, consistent with most of this decade (but down from around 2005 when they sat at 10 per cent).

So Auckland's first home buyer's aren't sacrificing property type in a major way. It's more the property's location - they are buying further from town or in a less desirable suburb.

Perhaps this isn't surprising given our seemingly genetic desire for a bit of land, but it's something that needs to be taken into account by all parties targeting first home buyers - whether addressing the demand or supply side of the equation.

Transport links to higher density housing may even need to be a major consideration if this trend continues.

The result of this election is going to be intriguing and the impact on New Zealand's home buyers particularly so.