New data reveals a quarter of residential property purchases are now going to first-home buyers
First home buyer activity has surged in recent months, according to the new Cotality-Westpac NZ First Home Buyer report.
Its data shows first home buyers accounting for 25% of all residential property purchases between January and April this year - the highest market share since before the pandemic, and well above the long-term average of 21–22%.
The national median FHB purchase price remains steady at $700,000, unchanged from last year and below the overall buyer median of $780,000. Monthly mortgage repayments have also dropped sharply, thanks to fixed rates falling 170–200 basis points compared to a year ago. That shift alone could save a typical first-home buyer around $800 per month in repayments.
The report notes that buyers have clearly capitalised on falling interest rates, strong property listings, and the ability to use KiwiSaver balances to secure deposits. However, while affordability has improved, the path into the market still relies heavily on a few crucial supports - and for many, getting in still means waiting longer and borrowing more.
The average first home buyer is also older than ever before - 37 in Auckland, 36 in Wellington, and 35 in Christchurch.
“This shift partly reflects conscious lifestyle choices — such as travel, building careers, or starting families - but housing affordability remains a key factor,” said Westpac NZ senior economist Satish Ranchhod (pictured).
KiwiSaver withdrawals and low-deposit lending doing heavy lifting
Changes in LVR rules to allow more low-deposit lending have given the FHB segment a substantial boost, as has the ability to use KiwiSaver withdrawals for a deposit. Ranchhod noted that these shifts have happened just as interest rates started coming down, which has created a very favourable environment for first-time buyers.
“In the case of KiwiSaver, we’ve seen the number of First Home Withdrawals trending higher since 2023,” Ranchhod told NZ Adviser. “That’s in part because the amount of funds in KiwiSaver has also been trending higher.
“Those changes have happened at the same time we’ve seen a sharp fall in mortgage rates,” he said. “The related falls in interest costs have resulted in a significant improvement in housing affordability.”
Ranchhod also noted that the recent KiwiSaver changes announced in Budget 2025 would help grow balances, which will help more borrowers to build up a deposit. However, this impact is likely to come gradually over time.
Buy now or keep renting? Good mortgage advice is key
With house prices beginning to rise again and wage growth slowing, many first-time buyers are asking whether they should buy now or wait. Ranchhod said the decision depends on personal financial circumstances, but there are some broader dynamics to watch.
The report noted that national property values are expected to rise modestly this year – by around 5%, or slightly more, as total property sales lift from 82,000 in 2024 to 92,000 in 2025. That means competition is likely to pick up, especially as other buyer groups begin to re-enter the market later in the year.
Cotality’s data also shows that first home buyers aren’t typically entering at the bottom of the market. While their median price paid is below the all-buyer median, it’s still well above the lower quartile, especially in urban centres like Auckland, Wellington and Hamilton. That reflects a deliberate choice: buyers are seeking value, but not necessarily sacrificing location or housing quality to get it.
When it comes to timing a first-home purchase, Ranchhod encouraged seeking tailored advice, and bearing wider market trends in mind.
“For those thinking about renting for longer, this could give them the chance to save a larger deposit, and we’re currently seeing limited growth in housing rents,” he said.
“However, potential buyers may also wish to consider the strength of both the housing market and the jobs market. While house price growth has been subdued in recent years, it is now turning higher with house prices pushing higher again. At the same time wage growth is cooling.”
“Finally potential buyers should also consider the outlook for interest rates,” Ranchhod said.
“The RBNZ’s recent May policy statement indicated that they are close to the end of their easing cycle, and current fixed-term mortgage rates already incorporate the chance of some further fall in the Official Cash Rate. Potential buyers should ask their adviser about how rates could change and what is the best approach for their lending.”
