According to Cotality NZ’s December Monthly Housing Chart Pack, national property values remained unchanged over the three months to November and sit 17.4 per cent below peak levels.
This combination of factors has created favourable conditions for first-time buyers entering the market.
First-home buyers accounted for 28.2 per cent of purchases across October and November combined, maintaining record highs, with particular strength in Hamilton, Wellington, and Dunedin.
Around half of all first-home buyer loans have recently been completed with less than a 20 per cent deposit.
Cotality NZ Chief Property Economist Kelvin Davidson said improved affordability has been a key driver of this trend.
“Lower mortgage rates and earlier price falls have changed the equation for first home buyers. Many now find conditions workable in a way they did not during the previous cycle,” Mr Davidson said.
The market has also seen a notable return of investors, who accounted for 25.0 per cent of purchases across October and November combined, reaching their highest share since 2021.
This activity has been most evident at the more affordable end of the market.
“Lower mortgage rates have reduced the cashflow pressure investors were facing during the downturn and when interest deductibility was being phased out, particularly for those targeting lower-priced properties,” Mr Davidson said.
“Many are focusing on existing dwellings, with the numbers starting to stack up again in a way they didn’t over the past couple of years.”
While first-home buyers and investors have become more active, relocating owner-occupiers remain quieter than normal.
“A cautiousness continues to weigh on movers, with many households choosing to stay put rather than take on the cost and disruption of trading up in a still-uncertain economic environment,” he said.
Sales volumes were 0.6 per cent lower in November than a year earlier, marking only the third annual decline in the past 31 months.
However, this softer result appears concentrated rather than widespread, with the modest dip focused primarily on Auckland and Wellington.
New listings activity has remained firm by recent standards, sitting higher than would normally be expected during typical seasonal patterns.
Total listings remain elevated, although the recent lift in sales has begun to place some downward pressure on available stock.
Nationally, listings were around 13 per cent lower than at the same time last year, while still sitting above levels recorded between 2020 and 2023 for the time of year.
The data shows no meaningful evidence that changes to the Brightline Test have triggered a widespread investor sell-down.
Cotality’s Home Value Index was unchanged in November, with the national median at $806,551, sitting 0.7 per cent lower than a year earlier.
Lower mortgage rates have supported demand and lifted sales activity, while elevated listing levels have continued to restrain price growth.
Looking ahead, Mr Davidson expects gradual improvement rather than a dramatic rebound.
“Mortgage rates have already fallen significantly and affordability has improved, but the response in property values has been slow,” he said.
“Economic growth is expected to strengthen through 2026, with unemployment forecast to ease.
“Those factors should support sentiment and property values, although any uplift is likely to be measured, with lending constraints such as debt-to-income ratio rules continuing to limit the pace of growth.”
