Rotorua first-home buyers are paying a median of $468,000 to get on to the property ladder, CoreLogic says. Photo / Getty Images
Rotorua first-home buyers are paying a median of $468,000 to get on to the property ladder, CoreLogic says. Photo / Getty Images
Rotorua first-home buyers could face an even bigger mountain to climb to secure a home if new mortgage lending rules come into force.
CoreLogic's latest Market Pulse report shows Rotorua first-home buyers are paying a median of $468,000 to get on to the property ladder.
Chief property economist Kelvin Davidsonsaid, however, new measures by the Reserve Bank of New Zealand to tighten loan-to-value ratios and bring in debt-to-income ratios could see wallets squeezed even harder.
The Reserve Bank has been consulting on reducing the share of owner-occupiers wanting to borrow more than 80 per cent of their purchase price from 20 per cent to 10 per cent of all bank lending.
Those are the people who can borrow even though they have a less than 20 per cent deposit.
"Rotorua has been an active market for first-home buyers in recent times - their market share of 28 per cent in Q2 was on a par with previous record highs."
Harcourts Rotorua sales manager Michelle Matthews said first-home buyers continued to be challenged by banking restrictions and increasing house prices.
"Usually, they are in direct competition with investors, however, since recent government legislation changes affecting investment property viability, investors have been less active.
"This is good news for the first-home buyer as they have been more successful of late."
First-home buyers had been active in the Western Heights, Mangakakahi and Owhata areas.
"To assist with deposits, they access KiwiSaver and, in many cases, receive gifting or leverage against family equity, and being most active up to $675,000," Matthews said.
"With continued pressure on prices and demand, we don't expect it to get any easier any time soon. Demand is simply outweighing supply."
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson. Photo / NZME
Simon Anderson, managing director of the Realty Group Ltd, which operates Eves and Bayleys, said anything making it harder for first-home buyers was not good for the market.
"We do want people owning their own homes in New Zealand and with the potential outlook for increasing interest rates is a double whammy."
Anderson said first-home buyers were still active even in the latest lockdown, with a few buying property via online auctions.
"They are still in the market."
Buying a home was a "big challenge" but getting on to the property ladder has never been easy, he said.
"It's not the right of everyone. It is something you've got to work towards and plan for by investing, saving, decision making." Buyers may need to look to areas with lower property prices.
Anderson said the main issue was not the LVRs or interest rates, but the low supply of houses. "There's still not enough houses."
The Real Estate Institute of New Zealand's latest data showed Rotorua's median house price has jumped 8.5 per cent since June to $640,000.
REINZ regional director Neville Falconer. Photo / Supplied
REINZ regional director Neville Falconer said first-home buyer activity had remained steady.
"However, bank lending remains the longest part of the process."
Falconer said more Bay of Plenty properties were now selling for $1 million or more and making up 31.4 per cent of all sales in July, up from 14.5 per cent of all sales in July 2020.
The median days to sell had dropped to 31 from 40 days at the same time last year.
"This is the lowest median number of days to sell for a July month since records began.
"Listings are expected to increase over the coming months as we approach spring and the warmer months."
ANZ external communications manager Kristy Martin said there was still some discretion for banks to lend at a higher LVR.
"We will always work with our customers on the best approach based on their individual circumstances.
"We understand how hard it can be to get a foot on the ladder and are always looking at ways to help."
Martin said ANZ's Blueprint to Build offer, launched in July, gave first-home buyers a 2.76 per cent discount, taking the rate to 1.68 per cent off the standard floating rate for new builds or turnkey properties.
First-home buyers could also receive a $3000 cash contribution offer when taking out new lending, she said.
"It's in everyone's interests for residential property prices to be sustainable long term, and for homeownership to be accessible to as many people as possible.
"That's why last year we were the first bank to increase the LVR for investors in an attempt to balance out the market."
Meanwhile, CoreLogic's latest Pain and Gain report showed Rotorua residents who resold their home in the second quarter of 2021 made a median profit of $328,500 per property.
The city's gross profit from resales between April 1 and June 30 this year was $62,817,822.
