In New Zealand, one of the New Year's resolutions of the residents there is to buy their own house. This has been made possible and easier for first-time buyers due to the increasing loan sources available.
In 2013, first-time home buyers had a hard time getting a loan to purchase their own homes due to the loan-to-value restrictions which was introduced and implemented in the country. This restriction policy made only less than 20 percent of the loan holders who were fortunate enough to get loans.
However, after two years since this restriction was implemented, somehow New Zealanders have noticed that this rule has been eased off a bit and because of that, a lot of the first-time buyers in 2015 were able to get loans and to get a house to settle.
This occurrence continued until this year 2016. "Data supplied by research firm CoreLogic shows investors are still the dominant force in the New Zealand property market," the report said.
Based from recorded number of house buyers, it increased 31 percent of all the transactions made in the last quarter of 2015 with 21 per cent of the first-time buyers in New Zealand market excluding Auckland. In Auckland, there has been 19 per cent increase on the first-time buyers in 2014 and in the last year, 23 per cent.
"It is likely there were the ones previously missing out and are now taking advantage of the less competitive market," CoreLogic analyst Nick Goodall said.
He added, "Forecasts are mixed for where the official cash rate (OCR) will go, but it's likely that interest rates will remain relatively stable, meaning favourable times for borrowing. This of course benefits all borrowers not just first-time home buyers, but with the other buyers constrained by further restrictions, first home-buyers should see less competition in the market, especially in the first few months of the year."
While the foreign buyers are still not in the peak of buying new homes in the country, those who don't own houses yet are encouraged to buy one before they [foreign buyers] come back. "
Most of the citizens especially the first-time buyers will likely purchase apartments as their first homes. This is because in Auckland, the mortgages are a lot cheaper and houses are easier to buy.
Geoff Barnett, national manager of agency, Century 21 New Zealand, said, "Most apartments offer a more affordable entry point, while at the same time the quality of constructions and the overall living environment has improved dramatically in many of the new apartment developments now coming on stream. That also ensures stronger capital gain prospects with banks now more willing to lend more on them."
