Property sales volumes fell for only the second time in 28 months in August, dropping by 5.2% compared to the same period a year ago, according to Cotality NZ’s Monthly Housing Chart Pack.
It reveals that while the market is treading water, softening prices and improved affordability are creating valuable opportunities, particularly for first home buyers.
The Cotality Home Value Index recorded a further drop of -0.2% in August, marking the fifth consecutive monthly fall. While this may signal ongoing weakness, it also means a given deposit can stretch further for prospective buyers.
"The recent property value downturn, while a reminder of market caution, is creating a more favourable landscape for buyers," said Kelvin Davidson, Chief Property Economist for Cotality NZ.
"We're seeing a clear shift in market composition, with first home buyers in their strongest position in two decades."
First home buyers accounted for 27.5% of purchases over July and August combined, a testament to their resilience in the current climate.
Mortgaged multiple property owners also remained active, making up 24.6% of the market during the same period. Meanwhile, movers were quieter than usual.
A key factor in this trend is improved affordability.
Low-deposit lending to all owner-occupiers remained subdued at just 12.9% in July, well below the 20% allowance. This indicates that with house prices softening, a larger number of buyers are able to enter the market with a more substantial deposit, reducing their reliance on high-LVR loans.
“What might be discouraging for some property owners is beneficial for those on the other side of the coin,” Davidson added.
“With affordability better, listings starting to fall, and more existing borrowers repricing loans down to market interest rates, 2026 may look stronger for both property sales volumes and values.”
“The market is largely tracking sideways for now, but there are clear signs that momentum could build into next year.”
Highlights from the September 2025 Housing Chart Pack include:
- New Zealand’s residential real estate market is worth a combined $1.65 trillion.
- The Cotality Home Value Index shows property values across New Zealand edged down by -0.2% in August. This was the fifth modest fall in a row.
- The total sales count over the 12 months to August is 87,875.
- There are around 26,100 total listings on the market. The total number of properties listed on the market remains elevated, but a slow rise in sales volumes is gradually eroding stock levels.
- The pace of rental growth remains weak, with net migration having fallen a long way from its peak, and the stock of available rental listings on the market still elevated.
- Buyer Classification data shows first home buyers made up more than 27% of purchases over July and August combined, while smaller investors (‘Mums and Dads’) are having a comeback, targeting cheaper, existing dwellings.
- Mortgage lending activity continues to rise, with bank switching still popular as more borrowers roll off a series of short-term fixed loans.
- Gross rental yields now stand at 3.8%, which is the highest level since mid-2016.
- Inflation is back in the 1–3% target range and the economy is subdued. The Reserve Bank looks set to cut the official cash rate again in the coming months, possibly reaching 2.5% by year-end.
- The Chart of the Month for September highlights a controlled share of mortgage lending being done at a low deposit or high loan to value ratio. The falls in house prices mean that a given dollar deposit goes further, and reduces the need for higher LVR lending.
