- First home buyers haven’t blinked, holding 27%+ market share in Q1 as cheaper prices and easier credit keep demand strong nationwide.
- Investors are re‑entering cautiously, with activity back near historic norms, driven mainly by smaller players testing the water again.
First home buyers are still very keen
The latest figures show that first home buyers’ (FHBs) share of property purchases in the first three months of the year held up at more than 27% – well above their long-term average back to 2005 of around 22%. It’s easy to get a bit blasé about this continued strength for FHBs, but we shouldn’t; it’s more great news.
In Auckland, their share was even higher (about 30%), with Hamilton at 33%, and the wider Wellington area soaring, at 37% (including both Upper Hutt and Lower Hutt at 41%). Other areas of strength around the country in Q1 2026 included Gisborne, Napier, and Palmerston North (all 31%), as well as Hastings and Invercargill (both 29%).
There remain multiple supports for FHB activity. Obviously, lower house prices and reduced mortgage rates help, as does access to KiwiSaver for at least part of their deposit. But not even needing to save a 20% deposit in the first place is proving beneficial too – as part of the LVR rules, the latest Reserve Bank figures show that more than half of FHB loans over January and February were done at less than 20% equity.
Mortgaged investors are back
Turning to mortgaged multiple property owners – MPOs, including the cliched ‘Mum and Dad’ investors – from twin troughs of 21% of activity in Q2 2023 and again in Q2 2024, their share has recently risen back to around 24%, more or less in line with their long-term average. Auckland is up at 26%, Hamilton 28%, and Christchurch 25%.
The data also shows that it’s the smaller players driving the overall rise for mortgaged MPOs – i.e. those that now own two properties after their latest purchase (which would generally be their own home and their first rental property). The MPO 3-4 category has also risen from a trough back in the middle of 2024.
For the MPO buyer group, key supports also include lower house prices and mortgage rates, as well as the shift back to 100% deductibility for interest costs – with the net result being far smaller ‘top ups’ required from other income sources to keep the cashflow position going.
Indeed, our calculations suggest a ‘typical’ new investor may have had to find an extra $400-$450 per week when house prices were higher and mortgage rates were 7% or more (and interest deductions were being phased out), but now that’s perhaps $150-$200 instead – even though buildings insurance and council
rates have risen steadily. It remains a sizeable chunk of cash, but still a lot more feasible for more people.
Movers are still biding their time
Relocating owner-occupiers, or ‘movers’, are another key buyer group, although they’ve been quieter than normal in recent years – for example, accounting for around 26% of activity in Q1 this year, below their average of 28% or so.
History shows that they take their lead from wider consumer confidence levels, economic growth, and job security, with the patchiness of these factors helping to explain movers’ low presence lately – but also suggesting that if and when the economy recovers over the medium term, this group would tend to become more prominent again.
Where to next?
Taking a look ahead, the Iran conflict has put an extra layer of uncertainty over that potential economic recovery, as well as the housing market outlook too.
Obviously the hope is that the ceasefire becomes permanent and we can get back to ‘normality’. But there’s always the risk it doesn’t prove lasting and, even if it does, there’ll still be some economic dislocation in the near term as a rebuild process gets underway.
Overall, there now seems a fair chance that our pre-existing forecast that property sales volumes could rise from around 90,000 in 2025 to about 100,000 in 2026 may be starting to look a bit strong. In addition, rather than a modest gain of up to 5% this year, property values may now be closer to flat, or even slightly down again.
But whatever the final total for sales volumes proves to be, how could each of the main buyer groups shape up? All else equal, movers could see their market share rise a bit as the economy (hopefully) recovers, while it also wouldn’t be a surprise to see mortgaged MPOs tick along at around recent levels – they have some supports, but also a few headwinds, including weak rental growth, the political cycle (e.g. possibility of a capital gains tax), and debt to income ratio caps.
If movers do perk up a bit, it’s not totally out of the question that FHBs’ market share drops a little in the next 12-18 months (after a very strong run) – after all, market share must always add up to 100%. But in a bigger pie with potentially more sales taking place, there could still be a higher raw number of FHBs.
