Flat values, easing rates fuel first-home buyer surge
First-home buyers have ended 2025 as the standout force in New Zealand’s housing market, claiming a record slice of activity even as overall property values stayed broadly flat.
Cotality’s Monthly Housing Chart Pack for January shows first-home buyers (FHBs) made up 28.8% of property purchases in December and 28.4% across the December quarter – the highest share since records began – with deal volumes holding up solidly.
REINZ data show sales and median prices largely stable in late 2025, underscoring a surprisingly resilient market backdrop for first-home buyers.
Window opens for first-home buyers
Behind the headline numbers, conditions have quietly shifted in favour of aspiring homeowners.
Mortgage rates have started to ease, KiwiSaver balances are being tapped to build deposits, and banks’ low‑deposit lending allowances are helping more FHBs over the line. In some cases, the cost of servicing a mortgage is now on par with – or even below – renting.
Cotality chief property economist Kelvin Davidson (pictured) said a rare combination of factors had tilted the market towards this group.
“First-home buyers are making the most of current market conditions,” Davidson said.
“With property values off their highs, mortgage rates easing, and support from KiwiSaver and low deposit lending, this group is well placed to take advantage of opportunities. For many, the gap between renting and buying has narrowed, making homeownership more achievable.”
Investors edge back in, but DTI rules loom
The upswing has not been evenly shared across buyer groups. Davidson noted that while first-home buyers are firmly on the front foot, investor activity remains more tentative.
“Mortgaged multiple property owners, including smaller and newer investors, continued to re‑engage cautiously with the market.
“Lower mortgage rates and reduced cashflow top ups on rental properties have helped investors targeting lower priced or existing dwellings.
“However, the lurking influence of debt to income (DTI) ratio limits in 2026 is expected to be an important consideration for investors over the coming year. The weakness of rents is an added challenge for investors, albeit great for tenants.”
Lower holding costs are drawing some investors back towards more affordable or existing stock, but soft rental growth and the prospect of tighter DTI settings are keeping a lid on confidence.
‘Movers’ stay cautious amid economic uncertainty
Relocating owner‑occupiers – households trading up or down – have been noticeably quieter, according to Davidson.
“Meanwhile, relocating owner-occupiers, or ‘movers’, remained quieter than usual with many households continuing to adopt a wait and see approach due to the cost and disruption of trading up in an uncertain economic environment,” the Cotality leader said.
With many existing owners wary of higher repayments, moving costs, and economic uncertainty, the “movers” segment is lagging the FHB resurgence, leaving first-home buyers as the clear leaders of the late‑2025 market.
For more information, access Cotality's Housing Chart Pack for January.
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