David Cunningham: Squirrel Mortgages CEO on first home buyers dominating the market

A notable shift in the housing market as first home buyers have the highest share of purchases in two decades. 

The Cotality Monthly Housing Chart shows first home buyers account for 27% of market activity in July, a 5% jump on the long-term average. 

It also finds existing homeowners trading up or down, remain at historically low levels. 

Head of Squirrel Mortgages' David Cunningham told Ryan Bridge there's less pressure on buyers to instantly throw an offer on a home. 

He says interest rates have gone down, KiwiSaver balances are higher, and there's less competition. 

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Episode Transcript

Speaker 1 (00:00):
So first home buy is account of for twenty seven
percent of the market in July. This is way above
their long term average of twenty one to twenty two percent.
And your movers, these are your owner occupiers selling and
rebuying pretty consistent, same levels we've seen we saw during
the global financial crisis. So this is new data out
this morning from Cotality. And David Cunningham is Chief Squirrel

(00:22):
at Squirrel Mortgages. David, good morning. Hey, right, so they're
getting on the ladder. What are they buying?

Speaker 2 (00:29):
Well, how'ses?

Speaker 1 (00:31):
What are we? Units?

Speaker 2 (00:32):
Are?

Speaker 1 (00:33):
Are we you know small ones?

Speaker 2 (00:35):
No? Well, the thing about the first time buyer market
at the moment is it's really a goldilocks market. They've
got so much choice because there's a lot of stuff
on the market. Fircelely, there's no urgency because houses aren't
selling as fast as they were. You know, go that
three years, you know, post COVID, if you didn't make
an offer, you know when you saw the house, it

(00:56):
was gone. So you've got time. You've got choices on
interest rates come down, keep you savor balances are higher,
and you've got less competition from both investors and and
and movers. Too, so you know Goldilocks time. It's a
bit like the farmers actually, and.

Speaker 1 (01:13):
You want to get in there quick, done you before
prices start going back up again. The race I've further down.

Speaker 2 (01:20):
Yeah, yeah, yeah, Look, coming back back to your earlier question,
what are they buying? Well, they've got choice, so you
know they are buying. You know, it's typical. When I
bought my first house, it was a bit of a
do up and and you know the beauty is that
there's time to time to time to sort of do it.
But sorry, what was the question again? Early in the morning.

Speaker 1 (01:41):
Let's say I want to ask you about the o
c R yesterday. Do you think that that? I mean,
what are you going to expecting to see in terms
of deals from banks in the next couple of months.

Speaker 2 (01:52):
Yeah, look, we'll see interest rates drift down about That's
what sort of happens. You know, your floating rate moves
worth the o c are literally on the day or
even beforehand or immediately after. But your fixed rates is
where everyone goes to New Zealand, you know, almost everyone's
on a fixed rate and they're much lower than flooding rates.
So there is a being surprise to market a worth

(02:14):
about at least another quarter percent of four coast drops
in the OCR than what was there before. So wholesale
rates fell by about that. Therefore retail rates will fall
fall by about that. So I think we'll get to
about four and a half percent, likely on the one year,
maybe even the two year, over the next over the months,
he head, assuming things played as they are, it's you know,

(02:34):
this challenge that the New Zealand economy is the sort
of pulse of activity and it's sort of coming from
the Eggrey sector just needs to sort of get us
out of this gloomy mood. Eh.

Speaker 1 (02:44):
Oh, something's got it, David. He appreciate your time this morning.
Thanks for being on the show. David Cunninghan as Chief
Squirrel at Squirrel Mortgages.

Speaker 2 (02:52):
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