First-Time Home Buyers in New Zealand Finding More Value for Their Money

Date Published: 13 May 2024

Key Facts

• First home buyers in New Zealand are currently gaining more for their money due to real estate trends.
• Property experts attribute this shift to lower deposit rates and the recent removal of loan to value ratio (LVR) restrictions.
• It is found that first home buyers are now able to negotiate better deals and are increasingly becoming competition for investors.
• However, some risks are associated with the current market conditions, including the risk of property values dropping.

Article Summary

In the New Zealand real estate market, there is an increasing shift towards favor of first home buyers. Due to low deposit rates and recent changes in financial regulation, such as the abolishment of loan to value ratio (LVR) restrictions, first home buyers are finding themselves with more negotiating power.

These new dynamics are enabling first home buyers to compete effectively with investors, a segment historically known for bidding up property prices. The greater access to finance is allowing these first home buyers to enter the market more easily and negotiate better terms in their deals.

Despite the rewarding conditions, property experts warn of potential risks. If property values were to decrease, individuals with high loan-to-value ratios may find themselves in negative equity. While the low-interest-rate environment is favourable for borrowers, it could become a trap if rates unexpectedly rise.

In summary, first home buyers are currently benefiting from more favourable market conditions, but they should also stay alert to potential risks associated with volatility in property values and fluctuating interest rates.

Source Link: To read the full article, click here.