Source: Cotality
First home buyers (FHBs) in New Zealand are making their mark, maintaining a record-high share of purchases, highlighting their ongoing market strength and motivation towards home-ownership, according to the latest Cotality-Westpac NZ First Home Buyer Report.
In the September quarter 2025, FHBs accounted for 27.7% of property purchases nationwide, a record-high, up from the previous best of 26.9% in the December quarter of last year. In a busier overall market, they are buying more properties in absolute terms too.
The trend is mirrored across the country’s main centres, urban areas, and provinces, where FHB market shares have recently been above historical averages.
In wider Wellington (Wellington City, Lower Hutt, Upper Hutt, Porirua), FHBs accounted for 36% of property purchase activity over the first nine months of 2025, with other markets such as Rotorua also strong (32%), as well as South Waikato and Timaru (both 28%).
Westpac lending data also shows that loans to first home buyers are at their highest level in more than three years, as lower interest rates have improved serviceability for this group. The national average LVR for FHBs is currently around 79%, up from less than 75% three years ago.
Cotality NZ Chief Property Economist Kelvin Davidson said FHBs are performing strongly in a market shaped by factors that currently benefit them, including increased choice and favourable LVR rules.
“In an environment where house prices and mortgage rates have both fallen, and resulted in better affordability, FHBs continue to fare well. Overall, banks and borrowers are already operating below the current, lower LVR speed limits, but FHBs are certainly making the most of the low-deposit finance that’s on offer,” he said.
Westpac NZ Senior Economist Satish Ranchhod also suggested that the lift in activity lately has been a result of continued large falls in mortgage rates that have encouraged FHBs to enter the market sooner with potentially lower deposits than they otherwise might have done.
“We’ve seen a lift in lending to first home buyers, with activity now at its highest level in more than three years. Lower interest rates mean some FHBs won’t need to raise as much equity, given that the same cash outflow will now service a larger loan”.
“Compared to this time last year, one-year fixed mortgage rates are nearly 150 basis points lower, while two-year fixed mortgage rates are around 250 basis points lower than in 2023. Those are big declines, and they’ve made the housing market a lot more accessible for would-be first home buyers.”
“It’s made a big impact. The fall in the one-year mortgage rate over the past year shaved around $485 off the average FHB’s monthly minimum mortgage payments. That’s a saving equivalent to 4-5% of the average first home buyer’s monthly income, based on the median price of $700,000,” he said.
Buyers take measured approach
The report also pointed out that even with easing barriers to access home financing, it’s still taking FHBs longer than before to enter the market.
The average age of a FHB has crept higher lately, rising to 36 years nationally, up from around 34 years prior to COVID.
“A rise in the average age for some FHBs may be a conscious choice on their part, reflecting other motivations such as an overseas experience first or establishing a career or family.
“For some buyers, they may also have simply decided to delay a purchase over the past few years without too much fear that house prices would spike higher in the meantime. But for others, the rise in average age will no doubt reflect affordability strains and a necessity to enter the market later,” said Mr Davidson.
At what cost?
The median price paid by first home buyers so far in 2025 is $700,000, only slightly above $695,000 in 2024. FHBs also continue to get ‘bang for buck’, with standalone houses a consistently strong share of their purchases.
Mr Davidson said first-home buyers continue to purchase at prices below the overall market median, but well above the lower end of the spectrum.
“The median for this group is lower than the all-buyer figure of $770,000, but significantly higher than the lower quartile across all buyers of $585,000.
“In other words, the typical FHB doesn’t always enter at the bottom of the market and work their way up, many enter the market well above the bottom rung of the ladder.
Cotality data also shows FHB activity has been rising across all price brackets.
“In the bottom 30% of the market by value, their share rose from 26% in 2015 to 33% in 2020 and is now 35%. A similar upwards trend can be seen in the middle 40% value bracket, and the top 30%,” he noted.
The big question
Looking ahead, housing conditions should remain favourable for FHBs in the near-term.
“Mortgage rates have fallen, KiwiSaver access for at least part of the deposit remains a strong support, and the LVR speed limits are set to ease from 1st December. Granted, house prices may well start to rise again in 2026, but the pace shouldn’t be so strong that FHBs fall behind,” said Mr Davidson.
“We expect the RBNZ to cut the OCR by 25bp at its 26 November meeting, justified by sluggish growth, rising unemployment, and modest underlying inflation. Over the year ahead, widespread mortgage rollovers onto lower rates will boost households’ spending power, suggesting the OCR will likely move to an ‘on hold’ stance in 2026,” concluded Mr Ranchhod.
