First home buyers in the capital taking over the property market
Tuesday, 28 October 2025
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Property prices might be subdued around the country but in Wellington first home buyers are making the most of it - now taking up a whopping 36% of the market.
Cotality’s monthly housing report showed property values fell even further in Auckland and Wellington in September while other areas were proving a bit more resilient, with modest growth in Christchurch and Tauranga, as well as Gisborne, New Plymouth, and Invercargill.
But Cotality’s chief property economist, Kelvin Davidson, said property buyers were enjoying favourable conditions. In particular, first-home buyers set a new national record in September, accounting for more than 28% of all purchases.
And, with the loan-to-value ratio rules set to loosen from December, there may be more room for them to take advantage, Davidson said.
None of it had changed the fact that Wellington has had the largest drop in median values in the country - now down 25.1% from the pandemic peak and a further 0.8% in the third quarter of the year.
Christchurch holds on to its spot as one of the most stable property markets with a 0.4% rise - the only main centre to rise other than Tauranga which went up 1.2% in the same quarter.
Christchurch also has the smallest decline in values since the peak during the pandemic - down 4.3% compared to many places which had double-digit falls.
Davidson said September sales volumes — across both private deals and real estate agents — were nearly 4% higher than the same time last year. It marked the 27th increase in the past 29 months, continuing the upward trend in agreed sales since the cyclical lows of 2022 and early 2023.
Nationally sales had risen 10.6% from last year.
With mortgage rates continuing to edge lower, further growth in sales activity seemed likely.
“The final few months of 2025 will be a really interesting period for the market - to assess whether the increase in sales is enough to outweigh the normal seasonal lift in new listings,” Davidson said.
The total number of properties listed on the market remained relatively high, although the recent lift in sales was starting to erode stock levels. Some vendors may also be choosing to withdraw their listings.
“Indeed, the number of available listings is now about 12% below this time last year, although above the levels of 2020-23 (for the time of year). All parts of the country have started to see stock levels fall, albeit not by much for the West Coast.”
Davidson said the most notable shift in the data over the past year or so, however, had been the comeback by mortgaged multiple property owners (including investors).
Their share was 24.4% over the third quarter, the highest since early 2021.
“This has been driven by smaller/new investors, who are looking at lower price bands and existing properties (albeit new-builds remain popular too). Lower mortgage rates and reduced cashflow top-ups are a key factor. Finally, relocating owner-occupiers - movers - remain quieter than normal, but might be poised to return, as wider market activity levels continue to rise.”
Davidson said around 64% of New Zealand’s existing mortgages by value were currently on fixed terms, but were due to reprice over the next 12 months. Of those, 32% would roll over within six months, while another 12% were on floating rates
“In other words, the bulk of mortgage-holders will see reduced repayments in the near term, which will give them a choice – possibly spend in the economy, but others may choose to save the extra cash and/or keep their repayments the same and reduce the debt faster.”
Davidson said the property market was largely tracking sideways for now. However, with improved affordability, fewer listings than last year, more borrowers repricing loans to current market rates, and a forecast drop in unemployment next year, 2026 could bring stronger growth in both sales volumes and property values.