First home buyer activity has held up in the first three months of the year, according to the latest figures released by Cotality.
Of all home purchases in the first quarter of 2026, 27% were first home buyers. Cotality said this is "well-above" the long-term average back to around 2005 of around 22%.
Activity was even higher in Auckland (30%), Hamilton (33%), Wellington (37%), Upper Hutt and Lower Hutt (41%).
Other strong areas included Gisborne, Napier, and Palmerston North which all were on 31%, and Hastings and Invercargill, which were both at 29%.
Cotality chief property economist Kelvin Davidson said there remained “multiple supports” for first home buyers such as lower house prices, reduced mortgage rates, KiwiSaver for at least part of a deposit, and loan-to-value ratios (LVRs) that allowed banks to lend money to those with low deposits.
“Not even needing to save a 20% deposit is proving beneficial too – as part of the LVR rules, the latest Reserve Bank figures show that more than half of first home buyer loans over January and February were done at less than 20% activity,” Davidson said.
Movers still biding time
He said relocating owners –another key buyer group – have been “quieter than normal in recent years”.
They accounted for around 26% of activity in the first quarter of this year, while their average was at about 28%.
“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,” Davidson added.
Mortgaged multiple property owners rise
Mortgaged property owners made up 21% of activity in the second quarters of 2023 and 2024. However now, their activity increased back to about 24%, which Davidson said was "more or less" in-line with their long-term average.
They were also up in centres such as Auckland (26%), Hamilton (28%), and Christchurch (25%).
Cotality's chief property economist said the data showed the smaller players were driving the overall increase, multiple property owners (MPOs) who owned two houses after their latest purchase – generally their own home and their first rental property.
"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," Davidson said.
He said a typical new investor might have had to find $400-$450 per week when house prices were higher, and mortgage rates were around 7%.
But now, Davidson said this was down to about $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."
Uncertain market
Davidson said the Iran conflict had put an extra layer of uncertainty both in the potential economic recovery and the housing market.
"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," he said.
"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."
Davidson said movers could increase their market share a bit as the economy "hopefully" recovered.
He said it also wouldn't be a surprise for mortgage multiple property owners to "tick along at around recent levels".
"They have some supports, but also a few headwinds, including weak rental growth, the political cycle – for example the possibility of a capital gains tax – and debt-to-income ratio caps."
Davidson added that if movers did perk up a bit, it was not out of the question first home buyers' market share "drops a little" in the next 12-18 months, after what he called 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 first home buyers."
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