Sales slip again but FHBs stay active as rents flatten and rates ease
New data from Cotality NZ’s Monthly Housing Chart Pack points to a housing market that is cooling but not collapsing, with first-home buyers emerging as the most reliable demand segment.
National sales volumes in February were 6.8% lower than a year earlier, following a 7.8% fall in January. It is the first time in almost three years that sales have declined in two consecutive months.
Property values are broadly stable month‑to‑month, with the national median up 0.2% in February, but still 1.2% below a year ago and about 17.3% under the early‑2022 peak.
Fresh QV figures paint a similar picture, with the QV House Price Index showing average residential values up just 0.2% over the three months to February and 0.4% lower than a year ago, even as the REINZ national median sale price rose 3.2% year‑on‑year to $795,000.
Cotality NZ chief property economist Kelvin Davidson (pictured) said buyer caution remains the defining feature.
“Sales volumes remain fairly sluggish and that’s a reminder that confidence takes time and is still rebuilding,” Davidson said, adding that while December looked unusually strong, “the housing market is still in a phase where buyers are taking their time.”
First-home buyers drive demand as movers and investors lag
Across January and February, first-home buyers accounted for around 27% of property purchases nationwide, with their share rising to about 30% in Auckland.
Davidson said improving affordability and lower mortgage rates are helping more FHBs into the market, supported by KiwiSaver withdrawals and banks’ low‑deposit lending allowances.
“In some cases, mortgage repayments can now look similar, or cheaper than rents, which can encourage tenants to move from renting to buying if they’re able to save for or access a deposit,” he said.
By contrast, movers made up just over 26% of purchases in the first two months of 2026, while mortgaged multiple property owners held a 24% share.
Davidson said the behaviour of owner‑occupiers trading up or down will be a key swing factor: a stronger economic backdrop could bring more movers back, lifting overall transaction volumes.
Rental market softens as repricing wave looms
The rental market remains subdued, with net migration well below previous peaks and listings still elevated. MBIE bond data show the median national rent fell 0.8% in the three months to January compared with a year earlier – a rare outcome after several years of strong increases.
Davidson noted that rents have already risen sharply and wage growth has eased, limiting scope for further rent hikes and pointing instead to a period of flat or only modest rental growth.
Looking ahead, around 59% of existing mortgages by value are due to be repriced over the next 12 months. That could give many households some relief if they roll onto lower mortgage rates, although global risks such as the US–Israel–Iran conflict and higher fuel prices still threaten to reignite inflation.
Davidson said that if those pressures prove temporary and the Reserve Bank can hold the OCR steady, the housing market should “gradually rebuild momentum”, but any recovery in prices and sales is likely to stay “modest rather than rapid.”
Access the full Cotality report here.
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