Source: Cotality
New Zealand's first home buyers continue to purchase property at near record levels, entering the market in greater numbers and securing more houses than in previous years, despite the market’s uncertain outlook.
The latest Cotality Westpac First Home Buyer Report shows first home buyers accounted for 27.5% of all sales in the first quarter of 2026, just short of the 28.2% record set in the final three months of last year.
Over the past 12 months, first home buyers purchased around 24,800 properties, the highest annual total since Q3 2021. Standalone houses comprised nearly 77% of all first home buyer purchases in the first three months of this year, the highest proportion since 2020 and up from 75% last year.
Cotality NZ Chief Property Economist Kelvin Davidson said market conditions had continued to favour first home buyers across most of the country.
He said while first home buyers have historically been willing to compromise on location or property type to move from renter to homeowner, there was little need for concessions in the current market.
“Lower property values and reduced mortgage costs have made a real difference, and we’re seeing that translate directly into activity,” Mr Davidson said.
“First home buyers are not just holding their ground, they are securing the type of property they want. There’s been an increase in standalone house purchases, which reflects how a more subdued market can present opportunities for those who have a deposit saved and the financial means to service a mortgage.”
Prices and deposits
Despite the weaker overall market conditions, first home buyers are paying a slightly higher median price of $720,000 to get into the market this year. That figure is up from around $700,000 in 2025, but below the Q1 2022 peak of $740,000.
Mr Davidson noted a typical first home buyer is not always buying the cheapest property available, instead often entering the market above the all-buyer lower quartile figure of $600,000.
“FHBs are getting the most for their money in a quieter housing market,” he said.
“It shows that a first-time buyer doesn’t always enter at the bottom of the market and work their way up, many enter the market well above the lowest tiers of the ladder.”
Reserve Bank data shows that more than half of first home buyer loans have recently been taken out with less than a 20% deposit. Westpac’s own lending records indicate the average loan-to-value ratio for first home buyers has risen to 81% nationally over the past year, up from below 77% in 2024.
Mr Davidson said the availability of high-LVR lending remained one of the most important structural supports for first home buyers.
“Many first home buyers don’t need a 20% deposit, and that’s been a significant factor in sustaining activity. Combined with KiwiSaver access, the pathway into ownership is more accessible than it appears,” he said.
Buyer age and location
Westpac’s borrower data shows the average age of first home buyers skewed younger last year, decreasing from 36 to 35 years of age. Auckland’s average remains higher at around 37, reflecting some lingering affordability pressures, while lower-priced regions such as Taranaki and Southland attract younger buyers.
First home buyer market share remains above long-term averages in every major centre. The wider Wellington area recorded the highest share at 37% of all purchases in Q1 2026, around 8 percentage points above its historical average. Hamilton was similarly elevated at 33%, with Auckland at 30%. Tauranga recorded 23%, still strong relative to its own average of 17%.
Among the main urban areas, Napier was a standout at 31%, 11 percentage points above its average, followed by Gisborne and Palmerston North, both above 30%.
Mortgage costs significantly lower
The reduction in borrowing costs over the past year has materially improved affordability for buyers. Excluding Auckland, minimum mortgage repayments on a typical first home are estimated to be around $130 per month lower than a year ago, and approximately $820 per month below 2024 levels. In Auckland, where entry prices are higher, the monthly saving is closer to $180 compared to a year ago and approximately $1,100 relative to 2024.
Westpac NZ Senior Economist Satish Ranchhod said the improvement in affordability had been a key driver of first home buyer activity, though the economic environment was becoming more complex.
“The falls in the OCR over the past year have been especially important for the property market and have made it meaningfully easier for first home buyers to get a foot on the ladder,” Mr Ranchhod said.
“However, rising oil prices and the associated lift in inflation are now creating a more challenging backdrop. We expect the Reserve Bank will begin raising the OCR from September, and fixed mortgage rates have already started to move higher from their recent lows. Prospective buyers would benefit from thinking carefully about how they structure their borrowing ahead of that trend.”
Outlook remains favourable
Despite the fluid macro environment, Westpac is forecasting only a modest fall in house prices of around 1% this year, with a gradual return to more moderate growth thereafter.
Mr Davidson said the key drivers supporting first home buyer activity remain in place.
“As other buyer groups begin to return to the market in larger numbers, first home buyers’ share of activity may ease from its current highs,” he said.
“However, in a gradually busier market they are still completing more purchases in absolute terms, and the conditions underpinning that trend are unlikely to disappear overnight.”
