First home buyers held their ground in 2019, however, the key shift in activity last year came from mortgaged investors. Nationally, the share of purchases from this segment rose to 25% by year-end. There were two areas where mortgaged investors accounted for at least 50% of activity in 2019 – Chedworth (Hamilton) and North Dunedin. Mortgaged investors tend to enter at lower size/value tiers too, reflecting better yields on cheaper properties.
With December’s data now to hand, the full 2019 results are available for the CoreLogic Buyer Classification series. What were the main trends last year and what might be in store for 2020? Most of the individual buyer groups held their ground in 2019, especially first home buyers, who tracked well at a 24% share of purchases throughout the year. Cash multiple property owners (MPOs, or investors) also had a steady presence.
The main story for 2019 (second half of the year), however, was the return of mortgaged investors. After flat-lining at 23% of purchases throughout 2018 and the first half of last year, their market share rose to 24% in Q3 and hit 25% in Q4 (see the first chart). This was the highest level since Q3 2016, which marked the peak for mortgaged investors, just prior to the Reserve Bank tightening the LVR speed limits and requiring a 40% deposit. The rise in mortgaged investors’ market share has also been driven by a genuine rise in activity (i.e. more purchases), not just because they’ve ‘held on’ better than other buyer groups.
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