He said the easing of the rules around the Credit Contract and Consumer Finance Act (CCCFA) may have helped, with further changes expected next year.
The Government’s moves to increase the caps on First Home grants has also helped, he said.
Davidson added with the recent increase in the cap for KiwiBuild homes, developers may be drawn to more of those properties – giving further options to would-be first home buyers.
Overall around 5250 private and agent sales were made through August – compared to the long-term average, over two decades, for August of around 7800 sales.
Kiwi cash buyers with multiple properties also saw an increase, last year multiple property owners made up 9-10 percent of the market share for cash, that’s seen an increase to 14-15 percent.
“To be fair, some of these buyers may have just rejigged the debt on other properties in a portfolio, meaning that the latest purchase isn’t ‘cash’ per se,” Davidson said.
“But even so, in this environment where mortgages are costlier and harder to get, it stands to reason cash buyers – potentially seeing ‘bargains’ – would have a higher share of the market.”
While mortgaged, multiple property owners’ market share saw a record low, dropping to 21 percent in August.
Davidson said new-builds remain the most popular amongst mortgaged investors, he did highlight it’s a relatively small share of the stock though.
“Generally speaking, this buyer group is facing pressure from the pincer movement of low rental yields, and slowing rental growth and higher mortgage rate, as well as the stringent 40 percent deposit requirements.”
Davidson added potential alternative assets like term deposits have risen too.
For relocating owner-occupiers for example movers – have “pulled back” in terms of market share.
The economist said purchasing a home while still owning another requires extra cash to upgrade from a three-bedroom to a four-bedroom property – which remains a barrier for some movers.
“The change in market circumstance (eg less bridging finance) and the return of more conditional offers (eg needing to sell before committing to a purchase) will also be slowing things down,” and may even halt some deals altogether, Davidson said.