First home buyers barrel through 2025 property market
Friday, 23 January 2026
First home buyers have finished 2025 by capturing a record-breaking share of New Zealand’s property market as easing mortgage rates and flexible deposit options create a window of opportunity.
In the latest monthly housing chart pack from Cotality, they accounted for 28.8% of all property purchases in December. For the fourth quarter as a whole, the group hit a 28.4% share, the highest quarterly level ever recorded.
The surge comes despite national property values remaining broadly flat throughout the year.
Cotality chief property economist Kelvin Davidson said first home buyers were making the most of current market conditions.
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“With property values off their highs, mortgage rates easing, and support from KiwiSaver and low‑deposit lending, this group is well placed to take advantage of opportunities. For many, the gap between renting and buying has narrowed, making home ownership more achievable,” Davidson said.
The combination of lower mortgage rates and the ability to leverage KiwiSaver funds has shifted the momentum in favour of those entering the market for the first time,
Davidson said that for many households, the math of homeownership was finally starting to stack up against the rental market.
He said the broader buyer landscape was more uneven though.
“Mortgaged multiple property owners, including smaller and newer investors, continued to re‑engage cautiously with the market,” he said.
He said lower mortgage rates and reduced cashflow top‑ups on rental properties had helped investors targeting lower‑priced or existing dwellings.
“However, the lurking influence of debt‑to‑income (DTI) ratio limits in 2026 is expected to be an important consideration for investors over the coming year. The weakness of rents is an added challenge for investors, albeit great for tenants.”
Relocating owner-occupiers remain unusually quiet. Davidson said many households were opting for a wait-and-see approach, deterred by the costs and logistical disruptions of trading up in an uncertain economy.
The year ended on a high note for overall activity, with December sales volumes sitting 19.7% higher than the same period in 2024. Total sales for the calendar year reached approximately 90,300.
However Davidson said the supply of available homes was tightening. Total listings were now roughly 18% lower than this time last year, as increased sales volume began to erode the stock levels.
He said while sales were up, the rental market remained subdued. National median rents fell by 1.2% in the three months to November compared to 2024 ‒ one of the largest declines in over three decades.
This weakness is attributed to a significant drop in net migration and a high stock of available rental listings.
Looking ahead, Davidson expected the first few months of 2026 to be interesting as the market tests whether the recent momentum in sales can outweigh the typical seasonal shifts.