Property Market – First home buyers resilient as owner occupiers show caution – Cotality

At the same time, activity among mortgaged multiple property owners (MMPOs) has returned, normalising after several years of weakness.
The Cotality NZ Monthly Housing Chart Pack – August 2025 shows that FHBs accounted for 27% of market activity in July, well above their long-term average of 21-22%. Movers, identified as existing owner-occupiers selling and rebuying, have sat consistently around the levels seen during the Global Financial Crisis, while MMPOs lifted to 25% of transactions, back in line with their historic norms.

Cotality NZ Chief Property Economist Kelvin Davidson said the latest buyer classification data reveals a significant reshaping of the country’s market.

“What we’re seeing is a marked composition shift,” Mr Davidson said.

“First home buyers are holding their strongest position in two decades, taking advantage of lower property values compared to the peak, access to KiwiSaver for at least part of their deposit, and the banks’ low-deposit lending allowances.”

“On the other hand, movers remain quieter than normal as affordability constraints linger and the challenges of high transaction costs and uncertainty roll on too, whether that’s due to jobs or the economy more broadly.”

First home buyers capitalising on softer values

The latest Chart Pack confirms FHBs remain a dominant force in 2025, buoyed by subdued house prices and targeted supports. Although national values are down almost 17% from peak levels, they have remained broadly flat this year, with the Cotality Home Value Index unchanged since December 2024.

Mr Davidson said that has created an opportunity for new entrants, especially in more affordable regions and lower-priced city suburbs.

“Conditions are tough for many households, but for buyers looking to enter the market for the first time, softer prices and reasonable access to credit have created a window of opportunity for the next generation to secure a property. 

As a result, we’re seeing both the share and raw number of FHB deals rising,” Mr Davidson said.

Movers at GFC-era lows

In contrast, movers’ participation in the market has fallen to the lowest levels since 2009. Despite a gradual rise in sales volumes nationally, up around 5% year-on-year in July, albeit off a low base, existing homeowners remain cautious.

High transaction costs, continued affordability considerations, and labour market uncertainty are compounding the restricted activity, Mr Davidson said.

“Many potential movers seem reluctant to take the leap, potentially because they’re uncertain about their ability to get a timely sale and a strong price for the existing home before they can start to ponder the next one,” he said.

“It’s a dynamic that can suppress sales volumes and have a dampening effect on confidence across the whole market.”

Investors step back in

The August Chart Pack also confirmed a resurgence of MMPOs, with their market share rising steadily from 21% in mid-2024 to 25% in July.

Mr Davidson said changes in both policy and financing costs have been pivotal in stimulating this momentum, with smaller and newer investors particularly active, targeting lower-value existing properties as well as some new-builds.

“The return to 100% mortgage interest deductibility has eased the tax bills, and lower mortgage rates have reduced the cashflow top-ups needed to hold an investment,” he said.

“That has shifted the balance for many landlords, allowing them to re-engage in the market and for newer investors given them the incentive to build a portfolio in more favourable conditions.”

Sales, listings, and credit conditions

Sales volumes have now risen in 25 of the past 27 months, although that activity has only recently returned to ‘normal’ levels after the deep trough of 2022-23.

While new listing numbers are tracking are relatively normal levels and total stock levels are beginning to fall (as sales rise), it’s a gradual process that is not yet creating conditions for clear or sustained price gains.

The Chart Pack notes that while banks appear to remain cautious, particularly with loan-to-value ratio (LVR) rules, some investors are steadily increasing their borrowing at lower LVRs.

At the same time, a large portion of existing loans are about to roll onto lower rates, which could ease household cashflows and free up capacity for new borrowing. Mr Davidson highlighted that around two thirds of mortgages are fixed and due to reprice in the next 12 months, with many households likely to see reduced repayments as rates fall.

“Lower mortgage rates have supported buyer demand, but the weak labour market and subdued economy are offsetting factors. Credit conditions remain an important filter on who can and can’t transact,” Mr Davidson said.

Spring outlook

Mr Davidson suggests these market composition changes are likely to persist through the rest of 2025 with FHBs set to remain active, movers constrained, and MMPOs steady, depending on policy and interest rate paths.

“The composition of buyers is arguably just as important as the headline sales numbers,” Mr Davidson said.

“Movers may continue to sit below their historical share, but they still drive a large portion of transactions in many areas. For investors, improving conditions point to a consistent level of activity and stable market share. And while first home buyers won’t stay at record highs indefinitely, even a smaller slice of a busier market would still see them active in greater numbers.”

The Cotality NZ Monthly Housing Chart Pack – August 2025 provides the latest breakdown of sales, listings, buyer classification, property values, rental dynamics, and credit flows, as well as selected economic indicators.

Highlights from the August 2025 Housing Chart Pack include:

• New Zealand’s residential real estate market is worth a combined $1.65 trillion.
• The Cotality Home Value Index shows property values across New Zealand edged down by -0.2% in July, the same as fall over the past 12 months.
• The total sales count over the 12 months to July was 87,482.
• Total listings on the market were around 26,100 in early August. The total number of properties listed on the market remains elevated, although the rise in agreed sales is starting to erode those stock levels a little.
• The pace of rental growth remains very subdued, with net migration having fallen a long way from its peak, and the stock of available rental listings on the market still elevated.
• Buyer Classification data shows first home buyers made up 27% of purchases in July, while smaller investors (‘Mums and Dads’) are having a comeback, targeting cheaper, existing dwellings.
• Gross rental yields now stand at 3.8%, which is the highest level since mid-2016.

Inflation is back in the 1–3% target range. The Reserve Bank cut the official cash rate on 20th August and looks set to deliver further cuts this year.

The Chart of the Month for July highlights the continued resilience of first home buyers, but also the return to a normal market share (around 25%) for mortgaged multiple property owners, after recent lulls.