Housing developments bring first homes closer to reality

First-home buyers across the country will be feeling a sense of relief as recent mortgage lending figures solidify - with decreased overseas investment opening the doors for more New Zealanders to make their first step in the property market.

An end-of-year report by interest.co.nz examined international investor fallout following the first month under the new Reserve Bank 40 per cent deposit rules for property investors.

Overseas borrowing drops to open up first-home potential

According to the report, the overall new mortgage investor share dropped to 27.1 per cent in October. Cascading downwards from 38 per cent in June through July (37 per cent) and August (33 per cent), it dropped under 30 per cent for the first time in 2016.

While the new RBNZ deposit rule of 40 per cent didn't officially begin for investors until October 1, banks applied the new investment rules at almost the same time they were announced, way back in mid-July. So what do the October figures for mortgage lending mean for first-home buyers across the nation?

In October, the total amount recorded for mortgage lending was almost $5.37 billion, down over $1.4 billion from the $6.8 billion figure in June. However, more than 75 per cent of this reduction is due to a retreat from the marketplace by investors.

The conclusions drawn from these figures for first-home buyers around the nation are largely positive - with lower overseas investment projected to open up a greater number of opportunities for this section of potential property investors. Certainly, October's figures for first-home lending shot to $768 million, an increase of more than $50 million from the previous month. Total borrowing figures are concurrently on the rise, with the collection of first-home buyers making up an additional 3.5 per cent from the figures in June.

More homes open greater first-home potential

The confidence distilled from these figures comes at an important time for first-home buyers across New Zealand. In a recent statement from Green Party co-leader Metiria Turei, up to 10,000 new homes were announced under a progressive ownership plan aiming to bring first homes into the realm of possibility for lower-income New Zealanders. 

"Up to 5,000 new, energy-efficient homes will also be available for the community housing sector to purchase using progressive ownership," Turei said at a conference in Rotorua.

"Investors who want low-risk, socially responsible investment options will be able to use their money to help fix the housing crisis - they'll be able to buy into the building of thousands of affordable houses for Kiwis who need them."

Rising population seeks affordable first-home investment

This comes amidst new figures of population growth for the period of 2013-2023, with Hobsonville seeing a 254 per cent increase, followed by Southwest Christchurch (105 per cent) and Central Christchurch (83 per cent).

The report, published by Infometrics, states that the strip of north Auckland between Orewa and Albany - alongside the south-east stretch of Drury to Beachlands - will be crucial areas of development to help curtail the side effects of an ever-increasing population. 

These figures will no doubt inspire confidence in the decision to implement the near-10,000 housing projects proposed by the Green Party.

"Building more houses that people can actually afford to buy is a critical part of solving the housing crisis. Our progressive ownership model will help to make the home ownership dream a reality for people," Turei said.

If you're looking to take the first step towards your first home in 2017, you'll want to find an affordable mortgage. Our experts can help you make the right decision for your crucial first investment, so get in touch with the team at Squirrel today.

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