Controversial credit protection legislation is having an adverse effect on first-time home buyers.
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CoreLogic's Buyer Classification data for January shows the Credit Contracts and Consumer Finance Act (CCCFA) had driven down the rate of home purchases by first time home buyers by a couple of percentage points to 24 percent in January from 26 percent in late 2021.
CoreLogic NZ chief property economist Kelvin Davidson said changes to loan-to-value ratio (LVR) bank lending restrictions for owner-occupiers was also taking a toll on first-time buyers.
"It's difficult to disentangle the two influences, but what is clear is that new buyers are being hampered by tighter credit policies," Davidson said.
Mortgaged investors' share of activity was steady at 24 percent, from about 30 percent in early 2021.
"Tight LVR rules and the phased removal of interest deductibility, as well as the delicate mix of low gross yields versus rising running costs such as mortgage rates are seemingly subduing investor demand," Davidson said.
He said cash buyers could play a more prominent role this year, as reduced competition for a larger selection of listings played into their hands, along with relocating owner-occupiers.
"This was indeed a feature of January's data, with movers' market share rising from 27 percent in late 2021 to 30 percent in January," he said.
