First Time Buyers have broken records as they claim a record-high share of the mortgage money advanced in June, taking advantage of low mortgage rates post lockdown, mirrored by the sales successes seen in Auckland auction rooms.

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First time buyers shake off any post-lockdown fears, break records.

First home buyers aren’t letting the cold post-lockdown days stop them from investing in the market, with new data revealing that the group took a record-high share of the mortgage money advanced in June.

According to the latest Reserve Bank mortgage lending by borrower type figures, the FHBs accounted for $1.09 billion of mortgages in June, which made up 20.3% of the $5.364 billion total advanced during the month. The RBNZ said that was the highest percentage recorded by the FHBs since it had started collating the information in 2013. Compared with the same month in 2019 the FHB borrowing was up 17.7% from $926 million.

Additionally, the FHBs actually out-borrowed the investors in June, which is only the second time that’s happened (the first time in May last year) since the RBNZ started publicly releasing the data in August 2014. The $1.04 billion borrowed by the investor group in June represented 19.4% of the total advanced, which was the lowest share of mortgage money taken by the investors since August last year, which may come as a surprise to many, as the previous requirement for them to find 30% deposits has now gone, lifted by the RBNZ when it removed the limits on high loan to value ratio (LVR) lending.

In terms of the total amount of money borrowed in total during June, this represented a continued bounce-back of the housing market after the April lockdown month with a total of $5.364 billion borrowed. This was up 24.2% on the $4.318 billion borrowed in May, while the May total was up some 57.1% on the $2.749 billion borrowed in April.

Sales rates soar in auction rooms

The good news continues to roll in for Auckland’s largest agency, Barfoot & Thompson, who saw a buoyant response in their residential property auctions last week – with sales achieved on almost two thirds of the agency’s auction properties.

Barfoot marketed 115 residential properties for sale by auction last week, which was down very slightly on the numbers offered over the last few weeks, which had consistently ranged from 122 to 125. But the sales rate was higher last week, with sales achieved on 73 properties, giving an overall sales rate of 63% – which is well up on the sales rates achieved over the previous few weeks, which had ranged from 42% to 54%.

Returning New Zealanders were playing a big part and attendance at auctions was strong. With record low interest rates, the market has defied all expectations, and most of the key metrics is returning to normal. With hundreds of buyers turning up to open homes for small units in Auckland, it is difficult to say whether Kiwis love affair with properties is slowing down.

-by Ravi Mehta, from Professional Financial Solutions