The property market is looking a lot more encouraging for first home buyers today than it did this time last year.
That’s because prices fell sharply during 2022, reducing the size of the deposit first home buyers need to enter the market.
Between January and November 2022, the price of the average property fell 10.2%, to $945,568, according to valuation firm QV.
In even better news, the price of the cheapest 25% homes in New Zealand – the kind first home buyers are most likely to buy – fell by an even greater amount (by 11.7%).
Focusing just on that cheapest 25%, these are the 10 locations where prices fell the most (in percentage terms) between January and November, and their new average prices:
- Upper Hutt down 23.5% to $544,200
- Hutt City down 23.3% to $547,300
- Porirua down 19.1% to $591,000
- Auckland City down 18.8% to $500,800
- Wellington City down 18.8% to $568,600
- Papakura down 16.7% to $712,600
- Dunedin down 15.9% to $408,200
- North Shore down 15.9% to $843,500
- Palmerston North down 15.0% to $456,300
- Hastings down 13.9% to $467,800
QV spokesperson Simon Petersen said prices came back a long way in 2022, after increasing by almost 30% in 2021.
“The upside of the current downturn is that, in the years ahead, prospective first-home buyers who have been locked out of the property market for so long should eventually have better opportunities to climb on that property ladder, without having to head across the ditch to accomplish their home ownership dream,” he said.
Why expert advice is more important than ever
That said, Mr Petersen did point out one challenge first home buyers will face this year.
The Reserve Bank of New Zealand made a series of official cash rate increases in 2022, and is likely to make more in 2023, he said.
“That’s not good news for home buyers or homeowners, because getting finance to buy property and then servicing a mortgage will become that much more difficult,” he said.
That’s why it’s a good idea for first home buyers to work with an expert mortgage adviser.
We can compare home loans on your behalf, to find a competitive interest rate. Also, we can let you know which lenders would be more likely to approve your application and your preferred loan amount.