First home buyers dominate Wellington property market

Thursday, 17 July 2025

First home buyers have a firm grip on over a third of Wellington’s property market, making up 36% of purchases.

First home buyers have a firm grip on Wellington region’s property market with their share rising to 36% - the highest in the country.

And it’s not the only place, with those looking for their first property taking up more than 25% of the market in Auckland, Christchurch, Dunedin and Hamilton as well.

Wellington’s cool real estate market over the last months has meant the average price of a home has fallen 4.4% while values are also still sliding - dropping 0.5% in May to an average value now of $844,599.

Cotality NZ chief property economist Kelvin Davidson said the buying group to watch were those moving from one home to another in the next quarter.

But it also means that first home buyers can stretch their money a bit more.

Cotality NZ chief property economist Kelvin Davidson said first home buyers continued to benefit from being able to tap into their KiwiSaver for at least part of the deposit, as well making full use of the low deposit lending allowances at the banks.

“The fact that property values nationally remain 16% below the peak is an extra factor in buyers’ favour at present, as is the still-strong desire to ‘get on the ladder’ despite mortgage costs typically being higher than rents.”

Multiple property owners - including investors - were also on the comeback trail accounting for 23% of purchases in the second quarter of the year, although that was still down 2% from the average.

Davidson said among the main centres, Auckland and Christchurch saw 26% of activity go to mortgaged multiple property owners in the second quarter, with Hamilton a little higher again at 27%.

He said a closer look at the data revealed that this rebound for multiple property owners (MPO) was being led by smaller investors; those with a total portfolio of up to four properties (including their own home) have seen their share of the market rise from 12% to 14%.

“Meanwhile, there’s also been an increasingly active focus toward the more affordable end of the market. Mortgaged MPOs’ share of purchases in the bottom 30% of properties by value has risen from 21% in 2024 to 24% so far in 2025.”

He said there was also a growing preference among mortgaged investors to go for existing properties rather than new builds.

Lower mortgage rates were also be making property investment more appealing to a wider range of “Mum and Dad“ investors.

“ So far they’ve accounted for 23% of existing property purchases in 2025, up from 20% in 2024,” he said.

Davidson said that was not surprising as existing properties no longer have the same tax disadvantages they carried when interest deductibility was being phased out, and the abundance of listings on the market probably also means some savvy investors can pick up “bargains” in the lower price brackets, potentially with higher rental yields.

Lower mortgage rates would also be making property investment more appealing to a wider range of Mum and Dad investors.

“Given that they directly reduce the cashflow top-ups out of other income that are typically required on a rental property purchase. Over the past year or so, a typical top-up might have fallen from $400-$500 per week to about $200 now.”

However he said rents had generally gone flat lately - even going down in key markets like Auckland and Wellington while rates continued to rise.

Davidson said the group to watch was movers who had been relatively quiet in the last few years in the next quarter.

He said household changes like births, marriages and job shifts always happen regardless of the property market and there could be some pent-up demand to move and a sluggish market could be the ideal time to do it.