First-home buyers drive spring lift in housing activity.
Economist Tony Alexander’s NZHL Property Report shows spring revival as first-home buyers dominate, auction attendance rises, and vendors return to New Zealand’s housing market.
The October survey of 253 licensed real estate agents reveals that while a solid buyer’s market remains in place, activity levels are improving as more vendors enter the market.
Alexander (pictured) said the results reflect a market that’s slowly recovering from a weak winter quarter.
“Recovery is underway and the recent cutting of one-year fixed mortgage rates to just below 4.5% will likely spur some additional buyer interest as we head through spring,” he said.
Young buyers continue to dominate, but investors remain subdued — many appear to be net sellers, with some choosing to sell when a tenant moves out. Meanwhile, prices are still seen as falling, and FOMO remains minimal despite vendors still hoping for “2021 prices.”
Cotality NZ’s Home Value Index also points to tentative stabilisation, with values edging up 0.1% in September to a $810,141 median after five months of decline. The lift comes amid speculation that the RBNZ could cut the OCR from 3% to 2.5% this week to support a slowing economy.
More buyers attending auctions and open homes
Agent activity has lifted across several indicators. A net 21% of agents reported seeing more people at auctions, up from 17% last month and the highest since late 2023. Open home attendance also improved, with a net 32% of agents seeing more visitors — the strongest reading since February.
However, Alexander noted that momentum remains uneven.
“Agent experiences of open home attendance are still quite diverse with some noting more people but others still struggling for customers,” he said.
Prices still edging lower but sentiment improving
A net 11% of agents reported that prices are falling in their area — a slight improvement from 13% last month and well down from 38% in May. The findings suggest that while more buyers are returning to the market, the pricing dynamic remains subdued, and buyers are willing to walk away when offers are rejected.
FOMO is still largely absent, with only 13% of agents reporting signs of urgency among buyers — little changed since February last year.
First-home buyers remain the driving force
The market continues to be powered by first-home buyers, with a net 53% of agents seeing more of them in the market this month.
“Young people have been taking advantage of high listings, limited competition, lower prices, and greater credit availability since early 2023,” Alexander said, adding there’s “no sign of this key dynamic easing.”
By contrast, only 7% of agents reported an increase in investor activity, down from 14% in September. Many investors remain cautious or are looking to exit.
“The dynamic has changed and one aspect of that is more investors looking to sell,” Alexander said.
Investor sell-off trend continues
A net 21% of agents said investors are bringing more properties to market to sell, suggesting a structural shift in investor behaviour since 2023. Motivations include rising maintenance costs, higher rates and insurance, and the need to fund retirement.
Despite lower mortgage rates, investors appear to be buying selectively.
“When asked what factors are encouraging investors to look to make a purchase, 54% of agents cite their hopes of finding a bargain,” Alexander said.
Buyer concerns still holding back momentum
Employment uncertainty remains a key barrier to a sustained housing recovery. The survey found 55% of agents said buyers are worried about job security and income stability — alongside continued concern about financing.
Alexander noted that the market’s next upturn will depend on improving household confidence.
“It is probably not going to be safe to talk about a sustained upturn in the housing market until these concerns substantially back off,” he said.
Market remains firmly tilted to buyers
Overall, the country remains in a buyer’s market, with a net 25% of agents saying vendors are the most motivated party in transactions. Alexander said that apart from a brief period late in 2023, “a buyer’s market has been present since the end of 2021.”
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