First-Home Buyers Surge Past Investors in NZ Market

For years, first-time homebuyers in New Zealand faced a daunting task: securing a mortgage to buy their dream home. But recently, that script has flipped. According to Cotality's records, which date back to 2005, first-home buyers have become the most active group of buyers in the market.

The total number of people buying their first home has been steadily increasing since 2022, with first-home buyers making up 29% of the national market. In Auckland and Wellington, they account for 31% and 37% of the market, respectively.

Cotality's chief property economist Kelvin Davison attributes this shift to several factors. House prices are down 18.2% from their 2022 peak, with Auckland down 24.5% and Wellington down 27.2%. When adjusted for inflation, house prices have only risen by 15-25% over the past seven years.

Reduced competition from investors is another key factor. Movers are sitting tight, and property investors have become more cautious due to flat rents and rising council rates and insurance costs. The Reserve Bank's loosening of loan-to-value ratio rules has also made it easier for first-home buyers to secure low-deposit loans.