First Home Buyers Are Winning — But Don't Count Everyone Else Out

First Home Buyers Are Winning — But Don't Count Everyone Else Out

New Zealand's housing market wrapped up 2025 without much fanfare. Values tracked broadly flat, headlines stayed quiet, and yet underneath the surface, something worth paying attention to was happening: first home buyers quietly had their best quarter on record.

A 28.4% market share in Q4 2025. That's not a blip — that's a structural shift.

So what changed? A few things came together at once. Interest rates dropped. KiwiSaver became a more meaningful deposit tool. And crucially, banks started actually using their low-deposit lending allowances. That old myth that you need a 20% deposit to get on the ladder? It's well past its use-by date. About half of all first home buyer loans right now are going through at less than 20% deposit — people are getting in at 10% or 15% and making it work.

There's also a simple financial reality that's starting to land for a lot of renters: in many cases, a mortgage is now cheaper than rent. Not after accounting for rates, insurance, and maintenance — but on a straight monthly payment comparison, the numbers are shifting. That's a powerful motivator.

Investors aren't gone — they're recalibrating.

Mortgaged property investors sit at 24.6% market share, roughly where they've historically averaged. The tax environment has improved since the last government — interest deductibility is back, bright-line tests are shorter — and lower interest rates have turned what were punishing top-ups of $500 a week on a rental into something closer to $150–$200. Still real money, but no longer a dealbreaker for many.

That said, 2026 is shaping up to be a complicated year for investors. It's an election year, so expect capital gains tax and interest deductibility to dominate the political conversation. Rents are flat to falling. Council rates and insurance costs are climbing. Debt-to-income restrictions are still lurking. Anyone holding property purely for capital gain is going to be doing some hard thinking about whether the numbers still stack up — and whether a different asset class might serve them better.

The group to actually watch? Movers.

Owner-occupiers looking to upsize or relocate have gone quiet, sitting at just 24.9% of the market. The explanation isn't complicated: when people feel shaky about their jobs, they don't commit to trading up, taking on more debt, and absorbing all the transaction costs that come with moving. They sit tight.

But life doesn't pause forever. Family situations change. And there's a meaningful amount of pent-up mover activity sitting on the sidelines waiting for confidence to return. If the economy turns a corner in 2026 — and there are signs it might — movers could be the catalyst that shifts market energy in a meaningful way.

The big picture?

First home buyers have had a genuine moment. Lower prices, lower rates, flexible deposit rules, and the maths of renting vs. owning finally working in their favour — it all aligned. And unlike previous cycles, the risk of being priced out by a rapid rebound looks lower than it has in years. Even a 5% price increase in 2026 would be modest enough that most first home buyers could keep pace.

The market isn't booming. But it is moving — just more quietly, and more equitably, than we're used to.