First home buyers were particularly strong in major city markets, taking 36 percent of Wellington sales, 34 percent in Hamilton and 28 percent in both Auckland and Christchurch.
Davidson said owner-occupiers looking to trade up were being held back by higher costs, including legal and removal fees, as well as a lack of choice in the type of properties they were wanting.
Investors were also being stymied by difficulties in getting bank finance, low rent yields, and – until recently – restrictive tax rules.
Davidson said factors to watch included an expected loosening of loan to value ratios (LVRs) likely to be around the middle of the year when debt to income ratios might come into force, reduced brightline tax rule, and mooted changes to bank lending rules in the Credit Contracts and Consumer Finance Act.
“I think they’re probably a story more for next year, there’s a cocktail of factors… that’s adding up to a view that there will be a boost to the market, but high mortgage rates will still be the key.”
One question would be whether the large number of redundancies looming in the public service might lead to a rise in distressed or mortgagee sales, but Davidson said banks had shown they were flexible in helping borrowers through tough times.
RNZ