Mortgage rates tipped lower as central bank shifts course
First-home buyers are enjoying their best opportunity in years to step onto the property ladder, with deposits going further, more listings available, and longer timeframes to negotiate, according to LJ Hooker head of research Mathew Tiller (pictured).
“Prices continue to drift and that’s given first-home buyers their best shot in years. Sales softened in August, and listings lifted into spring, so buyers with finance sorted now have more choice, more time, and a little more leverage,” Tiller said.
According to REINZ, the national median house price now sits at $761,000, just $4,000 lower than a year ago. While 13 of 16 regions recorded annual gains, Tiller said the trend remains mixed, best described as “sideways with a slight upward tilt.”
Why conditions are improving
Tiller said two shifts are putting first-home buyers in the box seat.
“Why first-home buyers are in the box seat comes down to two shifts,” he said. “First, affordability is quietly improving. According to Cotality’s Home Value Index, values edged down 0.2% in August, the fifth small fall in a row, so a given deposit now buys a little more house. Second, credit settings are not binding as tightly.”
“With listings higher and days to sell steady, buyers generally have more time for due diligence and to negotiate terms, not just price.”
Where the opportunities lie
Tiller highlighted affordable, well-supplied regions as standouts for entry-level buyers.
“I see the best first-home buyer opportunities in affordable, well-supplied regions,” he said.
“According to REINZ, Gisborne sits at the top of the annual median leaderboard, up 11.3%, yet still offers price points below the national median and improving listing depth. Southland is similar, up 8.9% year on year, with sensible brackets and days to sell trending better than earlier in the year.
“These markets share two things first-home buyers value, realistic entry prices and enough stock to compare, which supports cleaner negotiations and fewer rushed decisions.”
Tiller added that Wellington also presents selective buying opportunities.
“Wellington is still digesting prior gains and shows the largest annual median decline,” he said. “That creates selective buying windows for motivated first-home buyers who track suburb-level days on market and target quality listings that are sitting a touch longer.”
Economic settings favouring buyers
Tiller said broader economic shifts are also playing into first-home buyers’ hands.
“Rates, migration, and what comes next will set the tone for 2026,” he said. “Inflation is back inside the 1-3% target band and growth is soft. The Reserve Bank has already cut this cycle and looks set to ease again in the coming months if price pressures keep fading.
“As more borrowers roll off short, fixed terms, many are repricing down to lower rates, which improves serviceability and confidence.
“Looking forward, I see the market tracking sideways through spring, with a gradual firming into next year as mortgage rates step down and confidence stabilises. Sales should lift first as serviceability improves, followed by a gentle lift in values as listing growth moderates.
“First-home buyers remain the standout cohort, investors continue to target yield-friendly stock and movers become more active as days on market tighten.”
For mortgage advisers, the message is clear: first-home buyers are in the strongest position they’ve been in years, with easing affordability, growing stock, and more favourable lending conditions – all supported by a weaker economy and the likelihood of deeper OCR cuts.
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