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Property Institute questions government housing policy

The Property Institute of New Zealand has suggested a rethink of government housing policy in the wake of a new report that claims first time buyers dominated the market over the past five years.

Monday, May 28th 2018, 12:43PM

by Dan Dunkley

First time buyers have taken out more mortgages than any other buyer group over the past five years, excluding the Auckland market, according to the Institute's report.

Released alongside data company Valocity, the report tracks mortgage registrations across the country. It reveals first time buyers took up the biggest share of registrations over the five years to March 2018.

In the year to March 2016, first time buyers took out 40,000 mortgages, a 24% share of all mortgage lending. In the year to March 2018, the figure soared to 27%, though volumes dropped to 32,000.

Property Institute of New Zealand chief executive Ashley Church describes the findings as a “bombshell” and says the data could force a rethink of government housing policy: “Both National and Labour have been fixated on addressing the situation facing first home buyers in order to help more of them get into the market – but these figures suggest that this may not be the problem we all believed it to be.”

Church believes government construction projects such as KiwiBuild should be “targeted more broadly” at lower income buyers, rather than aiming at the first time buyer market, in light of the statistics.

The report suggests 2016 was the top of the housing cycle in New Zealand. The total number of mortgages uplifted in the year to March 2016 peaked at 164,000 and has dropped steadily since. Numbers reached 121,000 in the year to March 2018, the report claims.

The findings suggest the property market will remain stable. Median sales prices across New Zealand dropped 2.7% to $492k over the past 12 months - despite sales volumes plummeting by 31% since last April.

The Auckland market differs from the rest of the country. The report claims Auckland house prices will double by 2026/2027.

Tags: Infrastructure research

« Latest RBNZ figures reveal first time buyer boomGeneral Finance to join stock market »

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Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.44 4.69 4.89
ASB Bank Special - 3.95 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 3.95 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 3.95 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 4.45 4.69 4.99
TSB Special - 3.95 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.50 4.69 4.79

Last updated: 2 December 2018 8:39pm

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