First-home buyers entering property market despite soaring house prices

First-home buyers have been determined to enter the property market despite sky-high house prices – making up an increasing part of the Southern real estate market, according to CoreLogic.

CoreLogic’s data for the last quarter of 2020 reveals that first-home buyers made up 27% of all Dunedin buyers compared to only 24% for the same period in 2019. The number of first-home buyers in Invercargill increased from 26% to 28%, while the rates were steady in Queenstown (17%) and Central Otago (9%).

In Dunedin median prices increased by 1.9% to $582,000, Invercargill 2.5% to $379,000, Central Otago 1% to $592,000, and Queenstown 1.3% to $1.21 million.

CoreLogic head of research Nick Goodall said first-home buyers had changed their expectations about what and where they could buy, used their KiwiSaver funds, and taken advantage of low-interest rates to enter the market. However, doing this might not work in the future.

“At the current rates of growth, entering the property market will certainly become more difficult throughout the year,” Goodall said, as reported by Otago Daily Times.

Nidd Realty owner Joe Nidd added that places in Dunedin previously known as state housing areas and seen as undesirable were now fiercely contested by first-home buyers. Investors had also become active again, increasing demand further.

Well-built houses on good-sized sections with good views and sun are also in demand, regardless of areas’ previous perceptions.