PHOTO: FILE
🏠 2025 emerges as the year of the first-home buyer as rents record biggest fall in 30 years
2025 has shaped up as a standout year for first-home buyers, supported by flat house prices, easing mortgage rates, and one of the sharpest rent declines seen in decades.
Latest monthly housing data from Cotality shows national property values were broadly flat over the November quarter and remain 17.4 percent below their market peak, with the median national value sitting at $806,551.
While sales volumes dipped slightly — down 0.6 percent in November compared with the same period last year — first-home buyers continued to play a dominant role in market activity.
First-home buyers near record participation
First-home buyers accounted for 28 percent of nationwide purchases during October and November, edging ahead of investors, who made up 25 percent of transactions.
Participation was particularly strong in the main centres, with first-time buyers responsible for 29 percent of Auckland purchases and a striking 39 percent in Wellington.
Cotality chief property economist Kelvin Davidson said the share of purchases going to first-home buyers in 2025 was near historic highs.
He noted that strong first-home buyer activity has been sustained across both 2024 and 2025, driven by a combination of lower house prices, improved mortgage rates, reduced competition from investors, and a steady flow of new-build supply.
Access to KiwiSaver savings, which continue to grow over time, has also supported buyer confidence, alongside favourable lending conditions.
Lending conditions remain supportive
Banks have continued to offer low-deposit lending, with around 12–13 percent of owner-occupier loans written at loan-to-value ratios above 80 percent — comfortably within regulatory limits.
At the same time, falling rents have eased pressure on households, giving some buyers more flexibility around timing their entry into the market.
National rents were down 1.7 percent year-on-year, while Wellington recorded an almost 10 percent annual decline, marking one of the largest rental corrections seen in the past 30 years.
Despite this, Davidson said the underlying desire for home ownership remains strong, driven by the appeal of security of tenure and long-term stability.
Stock levels and market caution remain
The number of properties available for sale stood at 29,645, down 13 percent compared with a year earlier, suggesting that excess supply is gradually being absorbed.
Davidson said the recent slowdown in turnover — also reported by Real Estate Institute of New Zealand and described by Westpac economists as the market “hitting an air pocket” — highlighted lingering caution among buyers.
Economic uncertainty, elevated unemployment, and ongoing concerns about job security have continued to restrain big-ticket purchases, even among households still in stable employment.
Outlook: steady gains rather than rapid growth
Looking ahead, Davidson expects conditions to remain favourable for first-home buyers over the next 12–18 months.
While house prices are likely to resume modest growth, he said they are unlikely to accelerate rapidly, meaning deposits should not fall further behind.
As broader economic conditions improve and stock levels tighten, sales activity is expected to lift over the next 6–12 months, with price growth becoming more evident through 2026.
He added that investor behaviour will be an important segment to watch, particularly “mum and dad” investors, whose return to the market could be influenced by regulatory settings and the outcome of the next election.