First-home buyers across New Zealand have taken advantage of lower mortgage rates and below-peak property prices, maintaining a record share of market activity in the final months of 2025.

Cotality NZ’s December Monthly Housing Chart Pack shows national property values were unchanged over the three months to November and remain 17.4% below peak levels. At the same time, borrowing costs have eased materially, improving serviceability and bringing affordability measures closer to long-run norms.

Cotality NZ Chief Property Economist Kelvin Davidson said those conditions, alongside access to KiwiSaver savings and banks’ low-deposit lending allowances, have underpinned record first home buyer activity. Around half of all FHB loans have recently been done at less than a 20% deposit.

First home buyers accounted for 28.2% of purchases across October and November combined, still at record highs, with examples of strength including Hamilton, Wellington, and Dunedin.

“Lower mortgage rates and earlier price falls have changed the equation for first home buyers. Many now find conditions workable in a way they did not during the previous cycle,” Mr Davidson said.

Investors return

One of the more notable shifts in buyer behaviour over the past year has been the increasing presence of mortgaged multiple property owners, who accounted for 25.0% of purchases across October and November combined, the highest share since 2021.

Mr Davidson said activity has been most evident at the more affordable end of the market with the improvement in mortgage serviceability central to the return of smaller and newer investors.

“Lower mortgage rates have reduced the cashflow pressure investors were facing during the downturn and when interest deductibility was being phased out, particularly for those targeting lower-priced properties,” Mr Davidson said.

“Many are focusing on existing dwellings, with the numbers starting to stack up again in a way they didn’t over the past couple of years.”

New-build properties continue to attract interest from investors as well, supported by relative certainty around costs and rental demand while activity among relocating owner-occupiers, by contrast, remains quieter than normal.

“A cautiousness continues to weigh on movers, with many households choosing to stay put rather than take on the cost and disruption of trading up in a still-uncertain economic environment,” he said.

Sales decline as listings stabilise

Sales volumes were 0.6% lower in November than a year earlier, marking only the third annual decline in the past 31 months.

Mr Davidson said the softer result appeared concentrated rather than widespread with the modest dip in sales activity focused to some extent on Auckland and Wellington, rather than reflecting a broad-based slowdown.

“Mortgage rates have already fallen a long way over the past 12 to 18 months, and as more households roll onto lower fixed terms, conditions should remain supportive for sales activity into next year,” he said.

New listings activity has remained firm by recent standards, sitting higher than would normally be expected during the winter lull and spring lift seen in earlier cycles. Mr Davidson said there did not appear to be any meaningful evidence that changes to the Brightline Test have triggered a widespread investor sell-down.

Total listings remain elevated, although the recent lift in sales has begun to place some downward pressure on available stock. Nationally, listings were around 13% lower than at the same time last year, while still sitting above levels recorded between 2020 and 2023 for the time of year.

Gradual market improvement on the way

New Zealand’s broader economic indicators have begun to improve following a year shaped by opposing forces, Mr Davidson said.

Cotality’s Home Value Index was unchanged in November, with the national median at $806,551, sitting 0.7% lower than a year earlier. Lower mortgage rates have supported demand and lifted sales activity, while elevated listing levels have continued to restrain price growth.

Mr Davidson said improving borrowing conditions point to firmer market conditions in 2026 rather than a sharp rebound.

“Mortgage rates have already fallen significantly and affordability has improved, but the response in property values has been slow,” he said.

“Economic growth is expected to strengthen through 2026, with unemployment forecast to ease. Those factors should support sentiment and property values, although any uplift is likely to be measured, with lending constraints such as debt-to-income ratio rules continuing to limit the pace of growth.”

The Cotality NZ Monthly Housing Chart Pack, December 2025 provides the latest breakdown of sales, listings, mortgage lending activity, buyer classification, property values, rental trends, and economic indicators.

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Download the December Housing Chart Pack

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