First-home buyers are making the most of an absence of competition to snap up properties in a quiet market, new data shows.
By Susan Edmunds of RNZ
Cotality has released its latest buyer classification data, which shows that although overall New Zealand property sale numbers are falling, first-home buyers are increasingly active, and now make up 27.7% of all purchases. First-home buyers are making about 2% more purchases than they were a year ago.
That makes them the largest single cohort in the market.
Over the first five months of the year 36,152 properties changed hands, down 4.7% on the same time in 2025 but first-home buyers bought 10,025 of them, up from 9794 the same time a year earlier.
Cotality chief property economist Kelvin Davidson said there was continued strength among those buyers. "Their market share continues to just creep higher every quarter from record high to record high … it's actually because they're doing more deals.
"In an overall market where the number of sales is going down… First home buyers are actually buying more properties."
Simplicity chief economist Shamubeel Eaqub said first-home buyers could also be motivated to move now by the prospect of interest rates rising towards the later part of this year. "It feels like there are a few other drivers that are creating that momentum."
Davidson said although the flow of new listings coming on to the market had eased, buyers still had a lot to choose from and that was keeping prices flat. Cotality data showed values about 0.6% below where they were a year ago. Over three months, national values were up 0.1% but Auckland was down 0.5%, Wellington down 0.6% and Christchurch up 1.4%.
The number of purchases being made by people moving from another owner-occupied house was down about 11% in the year to date, and investor activity was down about 6%.
Davidson said investors might be worrying about the possibility of a tax change if Labour took power after the election, and could be doubting their long-term capital growth prospects.
"They were showing signs of a comeback through the last couple of years but we've got to the start of this year and perhaps they're just starting to tail off a bit. It could be due to any number of factors when there's uncertainty obviously in the economy and job uncertainty… the election is looming as well and we know that tax is going to be a feature of that."
He said some were wondering whether Labour planned to bring back its plan to remove investors' ability to deduct interest from their income for tax purposes.
New Zealand real estate is now worth a combined $1.67 trillion, and there is $398 billion in debt on it.
About 48% of household assets are held in residential real estate.
Davidson said the market had been generally flat since the post-Covid downturn.
"It's a market that's been pretty stable for a number of years now whichever cut of the data you look at and it doesn't appear there's too much coming to throw that off course.
"Some of the economic indicators are a bit soft but others have been a bit more resilient. I think the conditions we've seen in the past three to six months are set to stay in place."
Rents could be at a turning point, Davidson said.
"Stats NZ figures remain a bit volatile but showed a modest rise in rents of 0.7% in the year to May after a 0.4% increase in April."
But he said any sharp upturn was not likely given migration was still slow and rents were high compared to incomes.
"The falls we had previously seen are starting to peter out a bit. I think there's still decent choice out there for tenants... it's probably more reaching the floor and going flat, like we've seen with lots of other property indicators. Possibly a wee bit of a shift in momentum might be the right word."
The morning headlines including an unwelcome passenger hitches a ride on a prison van… a plan to rescue crew stranded in the strait of Hormuz.. and a baby goat named after the football goat Lionel Messi. (Source: 1News)
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