Investors gaining on first home buyers’ share of the property market

Wednesday, 19 November 2025

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While first home buyers are keeping a firm hold on the property market, making the most of lower prices and interest rates, close behind them are investors.

Cotality’s November monthly housing report put first home buyers as taking up 29% of property purchases - a new monthly record.

But the share of mortgaged multiple property owners, including investors, was up to 25.1% in October, the highest since April 2021.

Cotality NZ chief property economist Kelvin Davidson said the possibility of a capital gains tax (CGT) announced by Labour last month had prompted discussion at a time when market activity was steady rather than strong.

“The timing of Labour’s proposal is interesting. The market is getting busier but remains a touch below normal, affordability has improved, and investor participation is on the rise. Against that backdrop, the CGT debate naturally raises questions about behaviour, whether investors would hold properties longer to try and avoid the tax for a while, and how much revenue a tax might realistically generate,” Davidson said.

Of all the buyers, relocating owner occupiers or movers were the most cautious.

He said New Zealand’s property market remained largely stable heading into summer, with modest movements in values

National median property values remained broadly unchanged over the three months to October, edging 0.1% lower and sitting 17.3% below the 2022 peak.

Christchurch and Dunedin recorded modest gains, of 0.7% and 0.8% while Auckland dipped 1.0%. Wellington was also down 0.1% in the three months to October.

Davidson said the predictability of current conditions was reassuring for buyers, who were continuing to adjust to the recent experience of stable prices and slightly lower mortgage rates.

“With affordability gradually improving and employment conditions set to strengthen next year, there’s a growing sense of cautious optimism, even if the recovery will be measured rather than sharp. Debt-to-income ratio caps are a key factor to watch,” he said.

Sales volumes continued upward, rising by around 6% in October, compared to the same month last year, marking the 28th rise in the past 30 months.

Davidson said with more households repricing onto lower mortgage rates over the next year, further growth in sales activity remained likely.

New listings had also lifted through the middle of spring, pushing fresh stock onto the market.

However, Davidson said the rise in available listings was largely absorbed by the lift in sales, leaving total stock about 12% lower than the same time last year.

Davidson’s short-term outlook is that 2026 could bring firmer market conditions as lower interest rates work their way through household budgets.

“Affordability is at its best level in several years, listings are set to ease lower, and a large share of fixed loans are shifting onto cheaper rates. Provided employment holds up, those factors point to a gradual lift in both sales activity and values next year,” he said.

An OCR announcement is due next week - the final for the year - and a further cash rate cut is expected.

Davidson said they would be watching the final months of the year closely, as they would show whether the steady rise in sales was strong enough to keep absorbing the normal seasonal lift in new listings.

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