Latest news with #Corelogic
RNZ News
21-05-2025
- Business
- RNZ News
First-home buyers are getting into market with less savings, data shows
Banks can lend 20 percent of their new lending to owner-occupiers with less than 20 percent deposit or equity. Photo: Unsplash/ Artful Homes Forget saving a 20 percent deposit - large numbers of first-home buyers are getting into the market with much smaller levels of savings. Cotality, formerly Corelogic, has released its latest data, which includes Reserve Bank figures showing that 44 percent of all first-home buyers had less than a 20 percent deposit in March and first-home buyers were responsible for 78 percent of all low-deposit borrowing by owner-occupiers. Banks can lend 20 percent of their new lending to owner-occupiers with less than 20 percent deposit or equity. Reserve Bank data shows that in March there was $947m of lending to borrowers in that position, just $24m of which was to investors. That's a significant increase from March 2023, when there was just $510m in lending to borrowers with less than 20 percent, and last March, when there was $584m. "First-home buyers basically have the monopoly on low-deposit lending allowances at banks," Corelogic property economist Kelvin Davidson said. "Owner-occupiers further up the ladder may not need low-deposit finance as much so that's part of it, but I also think to some extent that the banks have been sort of reserving those speed limits for first-time buyers. "For quite a while now we've seen about 75 percent or 80 percent of all low-deposit lending to owner-occupiers in general has been to first-home buyers. "About two in every five first-home buyers, or even a bit more than that, are entering with a low deposit." Corelogic property economist Kelvin Davidson. Photo: SUPPLIED He said some buyers might not even be aware it was an option. "Some people might be out there thinking 'gee I don't have the required 20 percent so I can't buy a house', but actually there are allowances there and a lot of it goes to first-home buyers. "I think if you want to get into the market with a reduced deposit there probably is capacity - the speed limits overall aren't really being tested. "The speed limit there is 20 percent [of new lending] but only about 12 percent is going out at low deposit… then other tests come into it." He said KiwiSaver was also helping. In April, 3970 people withdrew their KiwiSaver funds for a first-home purchase, up from 3320 in April 2024, with a total of $167.3m withdrawn. Mortgage adviser Glen McLeod, head of Link Advisory, said borrowers with less than a 20 percent deposit were able to access interest rates from about 4.99 percent to 5.59 percent. "Those who qualify for a Kāinga Ora First Home Loan can access these same rates with as little as a 5 percent deposit, though a 0.50 percent fee applies. "When the deposit is under 20 percent, most lenders apply a low equity margin, which is typically tiered based on the loan-to-value ratio. "These margins vary by lender, but we're starting to see some shift in the market - one major bank has recently removed these margins altogether, offering a standard rate and a discounted rate for borrowers with more than 20 percent equity." He said it was noticeable that more applications were including income from boarders. "Whether it's friends helping with mortgage payments or adult children moving back home, many buyers are looking for ways to improve affordability. "In some cases, income from secondary dwellings or granny flats is also factored in, where accepted. It's a reflection of how people are adapting to meet lending criteria in a challenging environment." Adviser with Loan Market Karen Tatterson said a first-home buyer with ASB who had a 10 percent deposit would pay the advertised interest rate plus a 0.75 low-equity margin. "As an example, their one-year rate would be 5.7 percent. "ANZ, who do not charge a low-equity margin, apply their standard rate so for first-home buyer at 90 percent, their one-year rate would be 5.59 percent." She said all the banks were also offering $5000 cash contribution for a first-home buyer. Overall, Davidson said the market continued to steadily become more active. Sales were up 4 percent compared to a year earlier in April, taking activity to 7 percent above the historical normal for this time of year. "Sales activity has been on a steady incline, and we're now starting to see this translate into home values," Davidson said. The Cotality Home Value Index rose 0.3 percent in April - the fourth consecutive monthly increase - although growth remains modest. Among the main centres, Hamilton and Christchurch led the gains, while Dunedin, Wellington and Tauranga showed flatter results. "Despite these signs of improvement, the market remains tilted in favour of buyers," Davidson noted. He said the outlook for the rest of the year was for moderately increasing prices and activity. "We're expecting a moderate upswing, with national property values forecast to rise around 5 percent for the year," he said. "Lower mortgage rates will be a key driver. But we're also watching the wider economy, the labour market, and the impact of lending restrictions, particularly debt-to-income limits." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Scoop
17-05-2025
- Business
- Scoop
Is It Actually A Good Time To Buy A House?
Twice this week, first-home buyers have been told it might be their big chance to get into the market. , Money Correspondent Twice this week, first-home buyers have been told that now might be their big chance to get into the housing market. First, QV said a lull in property values was giving first-time buyers a 'rare opportunity'. Then, the Real Estate Institute acting chief executive Rowan Dixon suggested that, if first-home buyers were looking for a chance to get into the property market, it was a good time to do so. 'There is still plenty of stock there, particularly in the main centres, good pricing and low interest rates… if people can get into the market for their first home now is a good time to do it before maybe things start to pick up a bit more.' But just how great an opportunity is it, really? RNZ looked at a number of factors that could help answer that question. Interest rates Interest rates have fallen significantly, which helps to make the prospect of servicing a mortgage a bit more palatable. From a peak of about 7 percent, two-year home loan fixes are now about 5 percent. That means, for a typical first home mortgage of $567,448, the weekly repayment would be about $700. That's still about $60 more than the national average rental rate. Usually, falling interest rates push up house prices but that hasn't happened to a significant degree yet. 'There's a window where financing is cheaper but it hasn't quite flowed through to house prices as it might have done historically,' Corelogic chief property economist Kelvin Davidson said. Brad Olsen, chief executive at Infometrics, said rates were not expected to get back to the 2 percent levels seen through the Covid times. 'Interest rates are down but to more usual long-term levels.' House prices Nationally, house prices are still down about 15 percent from the peak, although they are still up 4 percent a year compared to five years ago. Wellington's prices are furthest from the peak, still down more than 25 percent, Auckland's are down 21.6 percent. But all prices are still higher than five years ago. Earlier data from Corelogic showed they were the areas that had the largest affordability improvements, bringing them close to long-term averages. Places like Queenstown and Christchurch are a bit of an outlier – Canterbury is now just 3.2 percent below the peak and Southland has already exceeded it 'Houses are more affordable than they were,' Davidson said. 'I still wouldn't say they are affordable as such – they're cheaper, but not necessarily cheap. But are house prices really going to fall significantly further from here? It seems unlikely. They'll probably turn around and rise a bit. There's a sense now that they're as cheap as they're going to be even if they're not necessarily cheap.' KiwiSaver Some buyers' KiwiSaver accounts may have taken a hit through the start of this year due to market volatility. Most of those could have shown signs of recovery over the past week. Davidson said it was likely that people who were planning to buy in the near term had already shifted their money to conservative funds before the wobbles hit. Stock on the market Buyers have a lot of choice at the moment, which gives them the upper hand. In a buyers' market, they can take their time over their decisions and know they have a lot of options. says the amount of stock for sale was up 6.2 percent year-on-year in April. Olsen said that meant buyers could bargain for a lower price and play sellers off against each other. 'If you want to get a sale and a possible buyer knows there is probably another house for sale down the road you'll be doing a fair bit to make sure your house gets sold.' Rent But it's actually a good time to be a renter, too. There is also a lot of rental stock on the market in lots of parts of the country, and advertised rents are dropping. The picture isn't consistent across the entire country but it's taking longer than normal to rent in most places with the exception of parts of Canterbury and Hawke's Bay. 'You could make a case of why rush into it when you could get a good deal on a rental for a while and you're probably not going to get left behind by the housing market in the meantime,' Davidson said. 'In general terms renting is always cheaper than buying so nothing has really changed there… if you stuck to that line of argument no one would ever buy a house.' The job market Buying a house usually means you need to have reliable income. While the worst might be nearly over for the labour market, it's likely to be weak for a while to come, which could mean job losses are more likely and it could be harder to find a new job if you are unemployed. Anyone who is worried about their job security might hesitate about buying a house. 'They might be able to afford the house at the moment but not if they lost their job and couldn't find a new one,' Olsen said. The other stuff Davidson said you could argue that it's 'always a good time to be a first-home buyer'. 'In the sense that if you want to buy a house, like the house, like the location, you're secure in your job and you want security of tenure and you can secure the finance, you're going to be there for the long-term why wait?' He said for many first-home buyers the decision was more than financial. 'They're setting up a family base.' He said if people looked for negatives they would probably never do anything. 'There are always pros and cons but if we're asking a binary question, is it a good time to buy, yes or no, I would have to say yes.' Olsen said he was always worried when people said buyers should 'rush in'. 'It comes across as scarcity marketing to scare people into rushing into buying. Buyers definitely have a good opportunity at the moment, that is true. But I think they should keep their wits about them, look at what's out there and how much they can afford, run some scenarios on what they could afford if things changed around mortgage rates or their job.'
Scoop
17-05-2025
- Business
- Scoop
Is It Actually A Good Time To Buy A House?
Article – RNZ Twice this week, first-home buyers have been told it might be their big chance to get into the market. , Money Correspondent Twice this week, first-home buyers have been told that now might be their big chance to get into the housing market. First, QV said a lull in property values was giving first-time buyers a 'rare opportunity'. Then, the Real Estate Institute acting chief executive Rowan Dixon suggested that, if first-home buyers were looking for a chance to get into the property market, it was a good time to do so. 'There is still plenty of stock there, particularly in the main centres, good pricing and low interest rates… if people can get into the market for their first home now is a good time to do it before maybe things start to pick up a bit more.' But just how great an opportunity is it, really? RNZ looked at a number of factors that could help answer that question. Interest rates Interest rates have fallen significantly, which helps to make the prospect of servicing a mortgage a bit more palatable. From a peak of about 7 percent, two-year home loan fixes are now about 5 percent. That means, for a typical first home mortgage of $567,448, the weekly repayment would be about $700. That's still about $60 more than the national average rental rate. Usually, falling interest rates push up house prices but that hasn't happened to a significant degree yet. 'There's a window where financing is cheaper but it hasn't quite flowed through to house prices as it might have done historically,' Corelogic chief property economist Kelvin Davidson said. Brad Olsen, chief executive at Infometrics, said rates were not expected to get back to the 2 percent levels seen through the Covid times. 'Interest rates are down but to more usual long-term levels.' House prices Nationally, house prices are still down about 15 percent from the peak, although they are still up 4 percent a year compared to five years ago. Wellington's prices are furthest from the peak, still down more than 25 percent, Auckland's are down 21.6 percent. But all prices are still higher than five years ago. Earlier data from Corelogic showed they were the areas that had the largest affordability improvements, bringing them close to long-term averages. Places like Queenstown and Christchurch are a bit of an outlier – Canterbury is now just 3.2 percent below the peak and Southland has already exceeded it 'Houses are more affordable than they were,' Davidson said. 'I still wouldn't say they are affordable as such – they're cheaper, but not necessarily cheap. But are house prices really going to fall significantly further from here? It seems unlikely. They'll probably turn around and rise a bit. There's a sense now that they're as cheap as they're going to be even if they're not necessarily cheap.' KiwiSaver Some buyers' KiwiSaver accounts may have taken a hit through the start of this year due to market volatility. Most of those could have shown signs of recovery over the past week. Davidson said it was likely that people who were planning to buy in the near term had already shifted their money to conservative funds before the wobbles hit. Stock on the market Buyers have a lot of choice at the moment, which gives them the upper hand. In a buyers' market, they can take their time over their decisions and know they have a lot of options. says the amount of stock for sale was up 6.2 percent year-on-year in April. Olsen said that meant buyers could bargain for a lower price and play sellers off against each other. 'If you want to get a sale and a possible buyer knows there is probably another house for sale down the road you'll be doing a fair bit to make sure your house gets sold.' Rent But it's actually a good time to be a renter, too. There is also a lot of rental stock on the market in lots of parts of the country, and advertised rents are dropping. The picture isn't consistent across the entire country but it's taking longer than normal to rent in most places with the exception of parts of Canterbury and Hawke's Bay. 'You could make a case of why rush into it when you could get a good deal on a rental for a while and you're probably not going to get left behind by the housing market in the meantime,' Davidson said. 'In general terms renting is always cheaper than buying so nothing has really changed there… if you stuck to that line of argument no one would ever buy a house.' The job market Buying a house usually means you need to have reliable income. While the worst might be nearly over for the labour market, it's likely to be weak for a while to come, which could mean job losses are more likely and it could be harder to find a new job if you are unemployed. Anyone who is worried about their job security might hesitate about buying a house. 'They might be able to afford the house at the moment but not if they lost their job and couldn't find a new one,' Olsen said. The other stuff Davidson said you could argue that it's 'always a good time to be a first-home buyer'. 'In the sense that if you want to buy a house, like the house, like the location, you're secure in your job and you want security of tenure and you can secure the finance, you're going to be there for the long-term why wait?' He said for many first-home buyers the decision was more than financial. 'They're setting up a family base.' He said if people looked for negatives they would probably never do anything. 'There are always pros and cons but if we're asking a binary question, is it a good time to buy, yes or no, I would have to say yes.' Olsen said he was always worried when people said buyers should 'rush in'. 'It comes across as scarcity marketing to scare people into rushing into buying. Buyers definitely have a good opportunity at the moment, that is true. But I think they should keep their wits about them, look at what's out there and how much they can afford, run some scenarios on what they could afford if things changed around mortgage rates or their job.'
Scoop
17-05-2025
- Business
- Scoop
Is It Actually A Good Time To Buy A House?
Twice this week, first-home buyers have been told that now might be their big chance to get into the housing market. First, QV said a lull in property values was giving first-time buyers a 'rare opportunity'. Then, the Real Estate Institute acting chief executive Rowan Dixon suggested that, if first-home buyers were looking for a chance to get into the property market, it was a good time to do so. 'There is still plenty of stock there, particularly in the main centres, good pricing and low interest rates… if people can get into the market for their first home now is a good time to do it before maybe things start to pick up a bit more.' But just how great an opportunity is it, really? RNZ looked at a number of factors that could help answer that question. Interest rates Interest rates have fallen significantly, which helps to make the prospect of servicing a mortgage a bit more palatable. From a peak of about 7 percent, two-year home loan fixes are now about 5 percent. That means, for a typical first home mortgage of $567,448, the weekly repayment would be about $700. That's still about $60 more than the national average rental rate. Usually, falling interest rates push up house prices but that hasn't happened to a significant degree yet. 'There's a window where financing is cheaper but it hasn't quite flowed through to house prices as it might have done historically,' Corelogic chief property economist Kelvin Davidson said. Brad Olsen, chief executive at Infometrics, said rates were not expected to get back to the 2 percent levels seen through the Covid times. 'Interest rates are down but to more usual long-term levels.' House prices Nationally, house prices are still down about 15 percent from the peak, although they are still up 4 percent a year compared to five years ago. Wellington's prices are furthest from the peak, still down more than 25 percent, Auckland's are down 21.6 percent. But all prices are still higher than five years ago. Earlier data from Corelogic showed they were the areas that had the largest affordability improvements, bringing them close to long-term averages. Places like Queenstown and Christchurch are a bit of an outlier – Canterbury is now just 3.2 percent below the peak and Southland has already exceeded it 'Houses are more affordable than they were,' Davidson said. 'I still wouldn't say they are affordable as such – they're cheaper, but not necessarily cheap. But are house prices really going to fall significantly further from here? It seems unlikely. They'll probably turn around and rise a bit. There's a sense now that they're as cheap as they're going to be even if they're not necessarily cheap.' KiwiSaver Some buyers' KiwiSaver accounts may have taken a hit through the start of this year due to market volatility. Most of those could have shown signs of recovery over the past week. Davidson said it was likely that people who were planning to buy in the near term had already shifted their money to conservative funds before the wobbles hit. Stock on the market Buyers have a lot of choice at the moment, which gives them the upper hand. In a buyers' market, they can take their time over their decisions and know they have a lot of options. says the amount of stock for sale was up 6.2 percent year-on-year in April. Olsen said that meant buyers could bargain for a lower price and play sellers off against each other. 'If you want to get a sale and a possible buyer knows there is probably another house for sale down the road you'll be doing a fair bit to make sure your house gets sold.' Rent But it's actually a good time to be a renter, too. There is also a lot of rental stock on the market in lots of parts of the country, and advertised rents are dropping. The picture isn't consistent across the entire country but it's taking longer than normal to rent in most places with the exception of parts of Canterbury and Hawke's Bay. 'You could make a case of why rush into it when you could get a good deal on a rental for a while and you're probably not going to get left behind by the housing market in the meantime,' Davidson said. 'In general terms renting is always cheaper than buying so nothing has really changed there… if you stuck to that line of argument no one would ever buy a house.' The job market Buying a house usually means you need to have reliable income. While the worst might be nearly over for the labour market, it's likely to be weak for a while to come, which could mean job losses are more likely and it could be harder to find a new job if you are unemployed. Anyone who is worried about their job security might hesitate about buying a house. 'They might be able to afford the house at the moment but not if they lost their job and couldn't find a new one,' Olsen said. The other stuff Davidson said you could argue that it's 'always a good time to be a first-home buyer'. 'In the sense that if you want to buy a house, like the house, like the location, you're secure in your job and you want security of tenure and you can secure the finance, you're going to be there for the long-term why wait?' He said for many first-home buyers the decision was more than financial. 'They're setting up a family base.' He said if people looked for negatives they would probably never do anything. 'There are always pros and cons but if we're asking a binary question, is it a good time to buy, yes or no, I would have to say yes.' Olsen said he was always worried when people said buyers should 'rush in'. 'It comes across as scarcity marketing to scare people into rushing into buying. Buyers definitely have a good opportunity at the moment, that is true. But I think they should keep their wits about them, look at what's out there and how much they can afford, run some scenarios on what they could afford if things changed around mortgage rates or their job.'
Scoop
17-05-2025
- Business
- Scoop
Is It Actually A Good Time To Buy A House?
, Money Correspondent Twice this week, first-home buyers have been told that now might be their big chance to get into the housing market. First, QV said a lull in property values was giving first-time buyers a "rare opportunity". Then, the Real Estate Institute acting chief executive Rowan Dixon suggested that, if first-home buyers were looking for a chance to get into the property market, it was a good time to do so. "There is still plenty of stock there, particularly in the main centres, good pricing and low interest rates… if people can get into the market for their first home now is a good time to do it before maybe things start to pick up a bit more." But just how great an opportunity is it, really? RNZ looked at a number of factors that could help answer that question. Interest rates Interest rates have fallen significantly, which helps to make the prospect of servicing a mortgage a bit more palatable. From a peak of about 7 percent, two-year home loan fixes are now about 5 percent. That means, for a typical first home mortgage of $567,448, the weekly repayment would be about $700. That's still about $60 more than the national average rental rate. Usually, falling interest rates push up house prices but that hasn't happened to a significant degree yet. "There's a window where financing is cheaper but it hasn't quite flowed through to house prices as it might have done historically," Corelogic chief property economist Kelvin Davidson said. Brad Olsen, chief executive at Infometrics, said rates were not expected to get back to the 2 percent levels seen through the Covid times. "Interest rates are down but to more usual long-term levels." House prices Nationally, house prices are still down about 15 percent from the peak, although they are still up 4 percent a year compared to five years ago. Wellington's prices are furthest from the peak, still down more than 25 percent, Auckland's are down 21.6 percent. But all prices are still higher than five years ago. Earlier data from Corelogic showed they were the areas that had the largest affordability improvements, bringing them close to long-term averages. Places like Queenstown and Christchurch are a bit of an outlier - Canterbury is now just 3.2 percent below the peak and Southland has already exceeded it "Houses are more affordable than they were," Davidson said. "I still wouldn't say they are affordable as such - they're cheaper, but not necessarily cheap. But are house prices really going to fall significantly further from here? It seems unlikely. They'll probably turn around and rise a bit. There's a sense now that they're as cheap as they're going to be even if they're not necessarily cheap." KiwiSaver Some buyers' KiwiSaver accounts may have taken a hit through the start of this year due to market volatility. Most of those could have shown signs of recovery over the past week. Davidson said it was likely that people who were planning to buy in the near term had already shifted their money to conservative funds before the wobbles hit. Stock on the market Buyers have a lot of choice at the moment, which gives them the upper hand. In a buyers' market, they can take their time over their decisions and know they have a lot of options. says the amount of stock for sale was up 6.2 percent year-on-year in April. Olsen said that meant buyers could bargain for a lower price and play sellers off against each other. "If you want to get a sale and a possible buyer knows there is probably another house for sale down the road you'll be doing a fair bit to make sure your house gets sold." Rent But it's actually a good time to be a renter, too. There is also a lot of rental stock on the market in lots of parts of the country, and advertised rents are dropping. The picture isn't consistent across the entire country but it's taking longer than normal to rent in most places with the exception of parts of Canterbury and Hawke's Bay. "You could make a case of why rush into it when you could get a good deal on a rental for a while and you're probably not going to get left behind by the housing market in the meantime," Davidson said. "In general terms renting is always cheaper than buying so nothing has really changed there… if you stuck to that line of argument no one would ever buy a house." The job market Buying a house usually means you need to have reliable income. While the worst might be nearly over for the labour market, it's likely to be weak for a while to come, which could mean job losses are more likely and it could be harder to find a new job if you are unemployed. Anyone who is worried about their job security might hesitate about buying a house. "They might be able to afford the house at the moment but not if they lost their job and couldn't find a new one," Olsen said. The other stuff Davidson said you could argue that it's "always a good time to be a first-home buyer". "In the sense that if you want to buy a house, like the house, like the location, you're secure in your job and you want security of tenure and you can secure the finance, you're going to be there for the long-term why wait?" He said for many first-home buyers the decision was more than financial. "They're setting up a family base." He said if people looked for negatives they would probably never do anything. "There are always pros and cons but if we're asking a binary question, is it a good time to buy, yes or no, I would have to say yes." Olsen said he was always worried when people said buyers should "rush in". "It comes across as scarcity marketing to scare people into rushing into buying. Buyers definitely have a good opportunity at the moment, that is true. But I think they should keep their wits about them, look at what's out there and how much they can afford, run some scenarios on what they could afford if things changed around mortgage rates or their job."
