Survey shows first‑home buyers, investors pull back despite willing banks
New Zealand mortgage advisers are reporting a quieter housing market as global tensions feed into local sentiment and rate expectations, according to the latest mortgages.co.nz & Tony Alexander Mortgage Advisers Survey.
That shift is consistent with wider housing data showing the post‑pandemic property recovery stalling again, with values only edging higher in some areas while many agents describe a clear buyer’s market.
A sharp swing in first-home buyer enquiry is one of the standout results.
“A net 54% of brokers this month have reported that they are seeing fewer enquiries for finance from first-home buyers.” That is a decisive turnaround from earlier in the year, when advisers were still seeing a net increase in young buyers seeking pre‑approvals and advice. Other surveys likewise find FOMO has faded, with buyers more willing to walk away or wait, as vendors become more realistic on price and negotiations take longer.
Investor demand has also dropped away. A net 49% of advisers now report seeing fewer property investors seeking mortgage advice, reversing the lift in investor enquiry seen late last year. For brokers, that means fewer new investment purchases coming through the pipeline, even as existing landlords remain active in refinancing and restructuring portfolios.
Recent agency reports point to a similar pattern on the ground, with many investors described as unmotivated to buy again while returns are squeezed by higher costs and only modest capital gains.
Banks stay open – but borrowers hesitate
Despite the pullback in demand, the survey suggests credit availability is holding up. Only a small net share of mortgage advisers say banks have become more willing to advance funds compared with March, but the reading remains in positive territory.
As Alexander (pictured) noted, “This tells us that there is no credit crunch underway as a result of the new disturbance to the country’s economic outlook from the developments in the Middle East.”
For brokers, that combination – willing lenders but nervous borrowers – creates an environment where borrowing capacity is available on paper, but many households are choosing to wait, reassess budgets, or delay upgrading plans.
Other housing indicators echo this disconnect, with measures like the QV House Price Index and Cotality NZ’s Home Value Index showing only very small monthly gains, national prices still below their 2022 peak, and war‑related uncertainty keeping confidence fragile.
Two‑year fixed mortgage rates remain the sweet spot
Rate‑fixing behaviour continues to cluster around the mid‑term.
“Almost 67% of brokers have reported that the term most favoured by borrowers is two years fixed,” Alexander said.
Interest in one‑year terms has faded over recent months, while three‑year fixes are attracting only modest attention compared with the boom‑time preferences of 2021.
For first-home buyers and property investors, the dominance of two‑year fixed mortgage rates reflects a desire to balance immediate rate certainty with flexibility if the rate cycle turns.
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