More first- home buyers are moving into Auckland suburbs such as Westgate, Glen Eden and Karaka as falling house prices and new terraced housing developments make it easier for them to get into areas they may have previously been shut out of.
Tighter financing rules and higher interest rates have made it harder for first- home buyers to get their feet foot on the property ladder this year. The number of purchases by first home buyers in Auckland in the first three months of 2022 - during the height of the credit crunch caused by the changes to the CCCFA and the LVRs - was at 2681, down 23% on the same period the year before.
In Hamilton, the number of first home buyer sales in the first three months of 2022 was, at 257, down 30% on the first three months of 2021.
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But those still buying have been branching out into new suburbs.
Compared to the first three months of 2021, thirty-six more first-home buyers bought in Westgate in the first quarter of 2022. Similarly, 33 more first home buyers bought in Glen Eden, 30 more bought in Karaka and 14 more bought in Otahuhu. These suburbs had the biggest increase in the number of first-home buyers moving in compared with the same period in 2021.
The figures provided by OneRoof’s data partner Valocity analysed where first-home buyers in Hamilton and Auckland bought in the first three months of 2022 compared to the same period last year. It included town houses, units, houses and lifestyle properties and excluded areas where there had been less than 20 sales in the last year.
However, the first-home buyers’ overall share in the market still grew slightly, up 1% in Auckland and by 2% in Hamilton.
Valocity senior research analyst Wayne Shum said the increase in popularity could be because the falling house prices were now making Westgate, Glen Eden and Karaka more affordable to first-home buyers.
“If prices start to come down or ease in pressure, you think ‘maybe I can afford the area I want, not the one I was settling for’.”
The suburbs that saw a significant rise in first-home buyers included new-build areas such as Karaka and the new subdivision in Westgate, near the new Costco, where hundreds of houses were being targeted at first-home buyers, he said.
Likewise, a lot of the new townhouses in Otahuhu would be attracting first-home buyers, especially because it was reasonably close to the city, while Glen Eden also had new townhouses, apartments and good transport options. “Glen Eden isn’t a bad area in terms of transport as well. You are right on the train lines so you don’t have to drive,” Shum said.
This two-bedroom, two-bathroom townhouse on Rosier Road is asking for $769,000 in popular Glen Eden. Photo / Supplied
Barfoot & Thompson salesperson Ying Li Howe, who sells property in West Auckland, said the increase in first-home buyers in both Glen Eden and Westgate could be due to a lot of new terraced housing settling in early 2022.
She has been involved in 30 settlements for terraced house in Rosier Park in Glen Eden in the last four months and these were typically two bedrooms and a study and priced around $760,000 to $770,000.
Howe said the terraced houses had been priced well last year so had not dropped in price. She is currently marketing the second stage of a terraced housing development in Rosier Park with a two-bedroom, two-bathroom townhouse at 61/102 Rosier Road priced at $769,000.
Glen Eden had become popular with first-home buyers in recent years because it was affordable, had a train station, and some of the fringe areas were zoned for popular schools such as Konini School, Kaurilands School and Glen Eden Intermediate, she said.
It also offered a good connection between the West Auckland lifestyle locations such as Piha and Oratia and central Auckland.
Westgate is also popular for its close proximity to motorway links, and its multiple shopping facilities, including the modern NorthWest Shopping Centre, and is predominantly made up for of newer terraced houses.
“People who want a modern lifestyle with a semi lock-up-and-go style, they generally pick that location because of the transportation.”
Howe said a similar property would probably cost about $50,0000 more in Westgate than Glen Eden.
Terraced houses in Kauri Green, a new subdivision in Westgate, were priced from $795,000 for a two-bedroom, one-bathroom terraced house.
The Kauri Green subdivision in Westgate, Waitakere, has terrace houses priced from $795,000 for two-bedrooms and a bathroom. Photo / Supplied
Meanwhile, areas that have traditionally attracted new owners due to their affordability were among the suburbs which saw the biggest year-on-year decrease of where people were getting on the property ladder.
In Papakura, 130 first-home buyers bought in the South Auckland suburb which was 38 less when compared with the same period last year, while Massey had 42 fewer, Hobsonville 33 less, Pukekohe down 31, Flat Bush 26 less and Manurewa, Papatoetoe and Titirangi all had 21 fewer first-home buyers than the same period last year.
Ray White Papakura principal Sandra Bullock said the drop in first-home buyer numbers at the start of the year was because the houses they were buying in Papakura were being snapped up by developers who had been pushing them up to “silly prices”.
Ray White Papakura salesperson Anthony Russell said the drop in Papakura was in line with what was happening across Auckland as people found it much harder to borrow money.
“The fact is first-home buyers now have to spend more money to pay a mortgage so the actual effect of the amount they can borrow is less and that won’t be enough to buy a house quite often.”
He said the changes to the CCCFA rules at the start of July didn’t appear to have made much of a difference and he was now seeing multi-generations all chipping in together to buy a house.
“You’ll have mum and dad and a couple of the kids buying in so you’ve effectively got four buyers.”
Russell said Papakura was one of the more affordable suburbs in Auckland and moreso now that developers had pulled out of the market.
Most of Hamilton’s suburbs saw little to no increase in the number of first-home buyers investing in them, with St Andrews the only suburb to see a notable increase with seven more buyers in that suburb compared with the same period last year.
The number of first-home buyers snapping up houses in Chartwell halved with 15 less first-home buyers (total of 16), followed by cheaper areas such as Nawton down 14 (total 21), Frankton down 10 (total 13). Fairfield (total 12), Dinsdale (total 21) and Huntington (total 15) all had 9 less first-home buyers than last year.
EVES Waikato general manager Sean Foster said there had been a significant drop in the number of houses sold in Hamilton in the last year and that was largely due to it being a lot harder for first-home buyers to get lending due to the CCCFA. However, in the last three weeks they had started to see first-home buyers returning and he believed this was not due to the slight drop in house prices, but because they had spent the last 90 days tidying up their accounts and they now had approvals ready to go.
“We are definitely seeing more first -home buyers into our open homes. I think the amendments to the CCCFA, I think with the coaching that mortgage brokers have provided those first-home buyers – they've very much enabled them to get out and buy.”
