Borrowers favour longer fixes as buyers’ market keeps property activity subdued.
A clear buyers’ market is keeping first-home buyers and property investors on the sidelines, with mortgage advisers reporting softer enquiry even as credit remains broadly available.
The March 2026 mortgages.co.nz–Tony Alexander Mortgage Advisers Survey found a sharp pullback in first-home buyer momentum, with the net share of advisers seeing more FHB clients dropping to just 8% from 33% a month earlier.
“First-home buyers show high awareness that the market is in their favour and continue to take their time making a deal”, Alexander (pictured) said.
Meanwhile, a net 18% of respondents said fewer property investors are seeking advice, down from a net 6% last month, as more landlords look to consolidate or sell rather than expand.
The findings come as national housing affordability has reached its most favourable level in almost 10 years, with the value‑to‑income ratio down to about 7.2, only slightly above the long‑run average of 6.8. Even so, the time needed to build a deposit remains a key constraint, with estimates suggesting it still takes around 9.6 years to save a 20% deposit, down from a post COVID peak of 13.4 years but still above historic norms.
Longer fixes back in favour as rate worries rise
While overall credit availability is stable, rate expectations are reshaping borrower behaviour.
Advisers say, “Most borrowers are showing a preference for fixing their mortgage interest rate for either two years or three years,” with three-year fixes jumping to 32% of borrower preferences from just 4% a month earlier.
The survey links this shift to renewed concern over inflation, rising oil prices, and the risk of further mortgage rate increases, prompting clients to trade short-term pricing for rate certainty.
For many advisers, refinancing conversations are also shifting away from chasing one-off cashback deals towards longer-term structure and pricing, as aggressive offers ease off, with a net 20% of advisers reporting fewer refinancing enquiries.
Investors cautious as listings rise and rents soften
Investor sentiment remains muted despite some banks having previously stretched above 70% LVR, with one major lender now withdrawing from that space.
One adviser observed that “the investor market hasn’t changed much, and conditions still feel relatively flat,” noting more investors selling and reducing debt rather than leveraging up.
Ample listings in markets such as Auckland mean “it remains a buyers’ market”, with some purchasers securing discounts at auction or below asking price.
Access the full report via the mortgages.co.nz website.
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