To help you become prepared and informed about buying your first home, we have put together the following ‘Top Ten Tips’ to help you get on the property ownership ladder.
Currently over 25% of NZ’s property market are first home buyers – the highest ever recorded – and so hopefully this year could be the year you are able to achieve home ownership!
Our tips include advice regarding both mortgages and the property buying process.
Tip 1. House Prices
Since 2022 the median first home buyers purchase price has dropped down from $719,000 to $698,000, according to industry data.
However, with property values also approximately 18% below their post COVID peak, this means you might have a better chance of finding a place you can afford.
Tip 2. Mortgage Rates
A positive trend for first-time buyers is the expectation of lower mortgage rates in 2025.
This trend of falling interest rates is expected to continue throughout 2025, making mortgages more affordable for new entrants to the market.
Tip 3. More Houses on the Market
There are already more properties up for grabs in 2025 compared to last year.
Property sales volumes are predicted to rise to approximately 90,000 in 2025, up from around 80,000 in 2024.
This increase represents a return to more normal levels of market activity.
For first home buyers, this means more opportunities to find suitable properties, but also potentially more competition.
Tip 4. The Right Time Is Now
In 2024 for those looking to buy their first home, first home buyers continued to be a dominant presence in the market.
In 2024, they accounted for over 25% of sales, and this trend is expected to continue into 2025 with the latest figures, sitting around 26.1%.
Whilst there are still other challenges for first home buyers, the idea that young people are locked out of homeownership is not so true as the market clearly indicates that there are still opportunities for new entrants to the property purchase market.
Tip 5. What are DTI’s
The amount you can borrow is governed by something known as DTI, which stands for ‘Debt To Income Ratio’.
Banks need to establish how much debt you can have compared to your income. So, as mortgage rates fall, Banks’ internal serviceability test rates will also decrease. This brings DTI rules more into play, potentially restricting borrowers’ capacity to secure larger loans.
First-home buyers should be prepared to navigate these regulations and understand how they might impact their borrowing capacity.
This is where engaging a Mortgage Adviser early in the process will help to inform you of what level of borrowing is possible.
Tip 6. Current Buyers Concerns
Interest rates have nearly disappeared, however new priorities have emerged.
These being access to financing and income stability.
First home buyers need to focus on strengthening their financial position and ensuring stable income to improve their chances of securing a mortgage.
When it comes to knowing which are the most important things to focus on, we can help guide you, so when it comes time to apply for your mortgage to the Bank, your application can be presented in the best light possible.
Tip 7. Where You Buy Matters
Depending on the area where you intend to buy, some areas are seeing house prices go up a bit, while others are going down.
So, first home buyers should research thoroughly and consider various regions, as opportunities and challenges can differ significantly across the country.
A bit of homework on different areas might pay dividends in the long run!
Tip 8. Government Initiatives
Government initiatives aimed at improving housing affordability, can provide significant assistance to first time buyers with low deposits.
So, keep in touch with your Mortgage Adviser as they can keep you informed about any new or updated initiatives that might be introduced to support first home buyers.
Tip 9. Help With Your Strategy
As Mortgage Advisers we can carefully assess the needs and financial situation of first home buyers, enabling them to adjust their expectations or strategy accordingly.
This is increasingly important with 2025 presenting various changes in the market, such as lower mortgage rates which improve affordability and borrowing capacity. Whereas stricter DTI rules may limit the amount of borrowing available.
Tip 10. 2025 And Beyond
The current outlook for 2025 appears favourable for first home buyers, however it’s important to think further down the track.
Factors such as potential interest rate changes over the life of your loan, your job security, future plans and being able to handle payments if things change.
Buying a home is a significant long term investment, so planning beyond the initial purchase is essential.
Here at iLender we don’t just help you get the mortgage; we can advise you as to how to plan to pay it off quickly too!
Lower mortgage rates and a steady price growth go to offering lots of opportunity in the property market, which means that 2025 is looking pretty good for first home buyers.
On your behalf, iLender can consider what all Banks have to offer, helping you make an informed decision, by running calculations for you, so you can see how you can maximise your borrowing power to obtain the best deal available for you.
By being well-prepared, doing your homework and getting advice from a trusted Mortgage Adviser, you’ll be able to know your home loan application is being managed with confidence.
So, feel free to reach out if you need a hand, or just to have a chat about this, pick up the phone and call 0800 LENDER (536337) or email to [email protected]
