Market Updates

A Buyer’s Market for First-Home Buyers? Record Market Share Meets Softer Prices

Sep 6, 2026

House plans in a notebook

First-home buyers are taking a bigger share of New Zealand property purchases than ever before.

Cotality's latest Housing Chart Pack shows first-home buyers accounted for a record 29% of purchases in July 2026, even as overall sales activity weakened and property values continued to drift lower.

That combination is worth paying attention to.

It suggests first-home buyers aren't simply sitting on the sidelines waiting for the market to recover. Many are using today's slower conditions, with more listings, less competition and softer prices, to get into the market while other buyer groups remain cautious.

But does that make this a genuine buyer's market?

For many first-home buyers, the answer is increasingly yes, provided the finance stacks up and you use the extra negotiating power carefully rather than treating it as permission to skip due diligence.

Why are first-home buyers so active right now?

Cotality says first-home buyers reached a new monthly record of 29% of property purchases in July.

At the same time, total property sales fell 6.4% compared with July 2025, marking the seventh consecutive month of year-on-year declines.

That means first-home buyers aren't taking a record share because the whole market is booming.

They're taking a larger slice of a relatively subdued market.

Cotality's Chief Property Economist Kelvin Davidson says high available stock is giving active buyers significant negotiating leverage, while first-home buyers have continued to increase their transaction volumes despite the broader slowdown.

Are house prices still falling?

Nationally, yes, although the declines remain relatively modest.

Cotality's newest Home Value Index, released on 4 September, shows national property values fell another 0.4% in August, the fifth consecutive monthly decline.

The national median property value was $797,944, down 1.0% from $805,799 a year earlier.

Among the main centres:

  • Auckland fell 0.5% in August

  • Wellington fell 0.6%

  • Tauranga fell 0.4%

  • Dunedin fell 0.2%

  • Hamilton fell 0.1%

  • Christchurch increased 0.1%.

Cotality describes the current environment as one of caution rather than distress. Buyers have little reason to rush because stock remains high and mortgage rates have risen, while most sellers aren't under enough financial pressure to slash prices aggressively.

That's an important distinction for first-home buyers.

A buyer's market doesn't necessarily mean sellers will accept any offer. It means buyers generally have more choice, more time and more ability to negotiate than they would in a strongly rising market.

First-home buyer checklist: how to use a buyer's market properly

1. Use the extra housing stock to compare, not rush

One of the biggest advantages for buyers right now is simply choice.

Cotality says the sustained slowdown in transactions has kept available listings high by historical standards.

In stronger seller's markets, first-home buyers can feel pressured to make decisions after one viewing, compromise on due diligence or stretch their budget because another buyer might take the property tomorrow.

Current conditions give you more opportunity to compare:

  • Similar houses in the same suburb

  • Recent comparable sales

  • Different building types and ages

  • Commute and transport options

  • Insurance availability

  • Renovation requirements

  • Body corporate costs for apartments and townhouses.

That extra time has real value.

A property being cheaper than it was two years ago doesn't automatically make it a good purchase. The goal is to find a property that works financially and holds up under proper investigation.

2. Get finance sorted before trying to negotiate hard

Having negotiating power is only useful if you're actually in a position to buy.

The latest Reserve Bank data shows residential mortgage lending remains substantial despite the quieter property market.

Banks advanced $8.266 billion of new lending fully secured by residential mortgages in July 2026, including around $5.876 billion for owner-occupier property use.

That's slightly below June and well below July 2025, reinforcing the picture of a slower lending market rather than one where credit has stopped flowing.

For a first-home buyer, a pre-approval can make your position much clearer before negotiating. Our smart buyer's guide to getting mortgage approval in New Zealand walks through what lenders look for and how to put your best application forward.

You want to know:

  • Your realistic maximum purchase price

  • What deposit the lender requires

  • Whether the property type affects approval

  • What conditions need to be satisfied

  • How long your approval remains valid

  • What repayments look like at current rates.

Ideally, your personal maximum should also be below the absolute maximum the bank says it could lend you.

3. Don't assume you need a 20% deposit

The latest RBNZ data confirms that substantial lending is still occurring above an 80% LVR. In July, banks made around $1.261 billion of new mortgage commitments above 80% LVR.

For lending without investment-property collateral, the category that includes owner-occupiers, approximately $1.212 billion was above 80% LVR. That means low-deposit lending remains a meaningful part of the mortgage market.

A 20% deposit is still an important benchmark because it puts an owner-occupier at an 80% LVR. For a detailed breakdown of how the rules work, see our guide to LVR rules, deposits and low-equity lending in New Zealand.

But buyers with 10% or 15% deposits shouldn't automatically assume home ownership is off the table.

Whether a lower-deposit application succeeds depends on the lender's available high-LVR allocation and your wider application, including income, expenses, debts, employment stability and ability to service the mortgage.

4. Negotiate on evidence, not because the headlines say "buyer's market"

This is where buyers can easily overplay their hand. Current conditions favour buyers, but Cotality's latest assessment is also clear that most sellers aren't capitulating.

Many vendors can afford to wait.

So rather than simply offering an arbitrary amount below the asking price, build your offer around evidence.

Look at:

  • Recent settled sales of genuinely comparable homes

  • How long the property has been listed

  • Whether the asking price has already changed

  • Building or maintenance issues

  • Upcoming body corporate work

  • Renovations required after purchase

  • Whether the sale is deadline, auction, tender or negotiation

  • The seller's circumstances, where legitimately known.

If three comparable homes recently sold around $720,000, that's stronger negotiating evidence than simply saying a property listed at $760,000 "feels expensive".

The biggest advantage buyers have today may not be enormous discounts. It may be the ability to walk away and look at another property.

5. Keep your finance conditions where you need them

A quieter market can reduce the pressure to make unconditional offers.

For many first-home buyers, that's valuable.

Depending on your situation and legal advice, conditions may include:

  • Finance

  • Building inspection

  • LIM review

  • Title review

  • Insurance confirmation

  • Solicitor approval

  • Sale of another property, where applicable.

Removing conditions purely to make an offer look more attractive can expose a buyer to significant risk.

Pre-approval helps, but it doesn't necessarily mean the bank has approved every property you could choose to purchase.

The lender may still need to assess the property itself, obtain a valuation or confirm final loan conditions.

A buyer's market is a good time to use sensible protections rather than discard them.

6. Do the building due diligence even when there are other properties available

More listings can tempt buyers to treat houses as interchangeable.

They're not.

Before committing to a property, investigate the specific risks.

Depending on the property, that could mean checking:

  • Weathertightness

  • Roof condition

  • Foundations

  • Plumbing and electrical systems

  • Unconsented alterations

  • Flooding or natural-hazard exposure

  • Cross-lease requirements

  • Unit-title and body corporate records

  • Planned maintenance

  • Insurance availability.

A $20,000 reduction negotiated off the price can quickly lose its value if the house has $60,000 of deferred maintenance.

Price negotiation and property due diligence should therefore happen together.

7. Stress-test repayments at higher rates

This is particularly important after the Reserve Bank's 2 September OCR increase to 2.75%.

The RBNZ has now increased the OCR twice consecutively and has said another increase may be required this year.

Mortgage rates have already been moving higher.

That creates an unusual combination for first-home buyers: property prices are soft, but borrowing costs are no longer falling. For more on what the rate increase means in practice, see our article on what today's OCR rise to 2.75% means for NZ home buyers.

Before making an offer, calculate repayments not only at the mortgage rate you're offered today, but also at a higher rate. Our mortgage calculators can help you model different scenarios quickly.

For example, if your intended rate were 5.5%, consider what your budget would look like at:

  • 5.75%

  • 6.0%

  • 6.5%.

You don't need to assume every one of those rates will happen.

The exercise simply tells you how much breathing room your household budget has. That matters far more than whether you negotiate another $5,000 off the purchase price.

8. Remember that affordability has improved, but buying is still expensive

Cotality's recent Housing Affordability Report provides useful perspective.

Its national value-to-income ratio has returned to 6.7, matching its long-run average since 2004. It estimates servicing a new mortgage at an 80% LVR currently takes around 40% of median household income, compared with a historical average around 42%.

The estimated time required to save a deposit has also fallen to around 8.9 years, close to its long-term average of nine years.

Those numbers are considerably better than during the peak affordability squeeze. But "back to average" shouldn't be confused with "cheap".

For many households, committing around 40% of gross income to a new mortgage is still substantial. That's why deposit size, loan structure and repayment buffer remain so important. If you're building your deposit with KiwiSaver, our complete guide to using KiwiSaver for your first home explains how the withdrawal and HomeStart grant process works.

9. If you're returning from Australia, sort the finance before you arrive

Current conditions may be particularly interesting for young New Zealanders considering a move home from Australia. A slower market means there's less reason to feel you need to rush back because prices are suddenly accelerating.

But buying from Australia creates extra planning requirements. Before seriously house hunting, work out:

  • Whether your lender will recognise Australian income

  • What documents it requires

  • Whether you're keeping your Australian job or starting a NZ role

  • How existing Australian debt affects borrowing capacity

  • How much of your deposit is held in AUD

  • How currency movements could alter its NZ-dollar value

  • How long international transfers may take.

A New Zealand citizen can generally purchase ordinary residential property while living overseas, but mortgage approval is a separate question. Our guide to buying a house in New Zealand before you move home covers the key steps and finance considerations for returning expats.

Is now actually a good time to buy your first home?

There isn't one answer for every buyer.

But today's market has several features that favour well-prepared first-home buyers:

  • More choice. Listing levels remain high by historical standards.

  • Less urgency. Sales have fallen year-on-year for seven consecutive months.

  • Softer pricing. National values declined for the fifth straight month in August.

  • Less investor and mover competition. Other buyer groups have generally been more cautious.

  • Finance is still available. Banks continue to make billions of dollars of new owner-occupier loans each month, including meaningful volumes of high-LVR lending.

And first-home buyers themselves are demonstrating that the environment is workable: their share of purchases has reached a record 29%.

But there's an important counterweight. Mortgage rates have begun rising again. That means waiting for house prices to fall another few percentage points doesn't automatically improve your financial position if the mortgage required to buy that house becomes more expensive.

Trying to pick the exact bottom of both the housing and interest-rate cycles is extremely difficult.

A better test is whether you can buy the right property at a reasonable price and comfortably afford the mortgage under a range of repayment scenarios.

What's not in the headlines

The record 29% market share doesn't mean first-home buyers are buying everything in sight.

Overall sales are down. The record share partly reflects first-home buyers remaining active while movers and investors have become more cautious.

That's still significant, but it's different from a first-home-buyer boom across the entire market.

The freshest data is actually slightly softer than the July figures. Since the August Housing Chart Pack was published, Cotality's September release has shown national property values declining another 0.4% in August. That strengthens the evidence that buyers still have time on their side rather than facing an accelerating market.

Mortgage credit remains available, but overall residential lending is softer than last year. July's $8.266 billion of residential mortgage lending was below the $9.032 billion recorded in July 2025. That fits the wider picture: the mortgage market is functioning, but buyer demand remains cautious.

Low-deposit lending hasn't disappeared. Around $1.261 billion of July mortgage commitments were above 80% LVR. For first-home buyers who have strong income but haven't yet reached a 20% deposit, exploring lending options can therefore be worthwhile rather than assuming they must wait.

Our takeaway

Yes, current conditions increasingly deserve the description "buyer's market" for first-home buyers, but it's a buyer's market built on patience, not distressed selling.

First-home buyers reached a record 29% share of purchases in July, property sales are subdued, listing levels remain elevated and national values fell again in August.

That gives first-home buyers more negotiating power and more time to make decisions than during the frenzied markets of previous years.

The opportunity isn't simply to offer the lowest possible price.

It's to use the market conditions to make a better-quality buying decision:

  • Get pre-approved before negotiating

  • Know your personal price ceiling

  • Compare multiple properties

  • Keep appropriate finance and due-diligence conditions

  • Investigate the property properly

  • Negotiate using comparable sales and property-specific evidence

  • Stress-test repayments above today's mortgage rate

  • Keep a cash buffer after settlement.

For buyers who can comfortably afford the mortgage and intend to own the property for the medium to long term, today's combination of greater choice, softer values and less buyer competition is worth serious consideration.

The strongest position isn't being able to predict exactly when the market will bottom. It's being financially prepared enough that you don't have to rush when the right property comes along. If you'd like help planning and preparing for your first home purchase contact our team today to discuss your options and receive a free plan to get you into your first home.

This article provides general information only and does not constitute personalised financial, legal or property advice. Mortgage rates, lending criteria and property-market conditions can change.

Deeper reads

Cotality: Monthly Housing Chart Pack, August 2026
The key source for July's record 29% first-home-buyer share, softer sales volumes and elevated housing stock.

Cotality: Property Values Fall for a Fifth Consecutive Month
The latest 4 September Home Value Index shows national property values falling 0.4% in August and explains why buyers remain under little pressure to rush.

RBNZ: New Residential Mortgage Lending by LVR
Official July lending data showing the volume of mortgages being approved at different loan-to-value ratios, including lending above 80% LVR.

RBNZ: New Lending by Purpose, July 2026
Released on 4 September, this gives the latest picture of new owner-occupier and residential-investor lending across registered banks.

Cotality: NZ Housing Affordability Returns to Long-Term Norms
Useful context on the improvement in value-to-income ratios, mortgage servicing costs and deposit-saving times.

Primary sources

OCR Now 2.75%: What Today's Rate Hike Means for NZ Home Buyers ›

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Senior Mortgage Advisor

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