First-home buyers hit record share of New Zealand market

First-home buyers accounted for a record 29.5% of New Zealand property purchases in the third quarter, as housing market activity softened among other buyer groups.

The latest Cotality-Westpac First Home Buyer Report said the share topped the previous record of 28.3% set in the prior quarter. It also showed first-home buyer purchases remained historically high at about 25,000 on a 12-month rolling basis, a level last seen briefly during the post-Covid housing surge.

The data points to a market in which new entrants have kept buying even as overall sales volumes were flat or falling. Cotality said first-home buyers had been supported by subdued house prices, access to low-deposit lending, and lower mortgage payments than when interest rates peaked in 2023.

Kelvin Davidson, chief property economist at Cotality NZ, said first-home buyers had benefited from current conditions.

"FHBs have always tended to be willing to compromise on location or property type to make the shift from renting into ownership, but lately there hasn't been much need to take such an approach," Davidson said.

Prices and choices

The report found first-home buyers were purchasing more standalone houses than in recent years. Standalone homes made up 76% of first-home buyer purchases so far in 2026, up from 75% in 2025 and above the low point of less than 70% in 2023. Across all buyers, standalone houses represented about 72% of purchases this year.

The median price paid by first-home buyers rose to $715,000 in 2026 from $701,000 in 2025. Even so, it remained about $4,000 below the level recorded in 2022.

Activity has also spread beyond the lowest-priced homes. First-home buyers accounted for about 30% of purchases in the middle 40% price bracket this year, compared with 28% in 2025 and 21% in 2015.

"This shows that FHBs are getting the most for their money in a quieter market," Davidson said. "Another important point is that FHBs don't always enter at the bottom of the housing ladder and work their way up - many actually enter well above the market's lowest tiers."

Lending support

Access to finance remains a key factor behind the trend. Recent Reserve Bank data showed more than half of first-home buyer loans were written with deposits of less than 20%, while Westpac's mortgage lending records indicated the average loan-to-value ratio for first-home buyer lending had stayed slightly above 80% in recent months.

KiwiSaver withdrawals for deposits also continued to support demand. The report said national property values remained more than 18% below their peak, helping keep entry prices lower than they were at the height of the market.

The improvement in affordability has also shown up in repayments. For the average first-home buyer, monthly mortgage payments were around $560 lower than in 2023, when interest rates peaked. In Auckland, the monthly saving was about $685.

Satish Ranchhod, senior economist at Westpac NZ, said conditions remained easier than they had been a few years ago.

"Even with the recent rise in mortgage rates, the housing market is still a lot more accessible for first-home buyers than a few years ago," Ranchhod said. "But with growing upward pressure on interest rates, it's a good time for prospective first-home buyers, or anyone with a refix coming up, to think about the best way to structure their borrowing."

Regional picture

First-home buyer activity was strong across the country rather than concentrated in a single city. In the wider Wellington area, first-home buyers accounted for just over 37% of purchases so far in 2026, above the long-term average of 30%.

Their market share also exceeded 30% in Hamilton and Auckland. Among another 12 urban areas, Palmerston North recorded a 33% share, while Rotorua, Gisborne, Hastings, and Invercargill all posted shares of at least 30%.

Westpac borrower data suggested buyers were also getting slightly older. The average age of first-home buyers edged up from about 35 late last year to 35.5, which the report said may reflect people taking longer to find a suitable property in a quieter market.

Outlook

Westpac expects average house prices to fall by 1.4% over 2026 before rising by 1.8% in 2027. That suggests first-home buyers may continue to find conditions more favourable than those seen during the previous market upswing, even if borrowing costs rise further.

Davidson said first-home buyers had remained resilient despite the challenges of entering the market.

"Overall, it's never easy to buy that first home and FHBs certainly continue to face challenges," Davidson said. "But their presence has remained strong in recent months and, although nothing lasts forever, it's not hard to imagine that FHBs stay a solid presence into 2027 as well."

Ranchhod said that combination of conditions meant there were still likely to be plenty of options for those looking to buy their first home over the coming year.