First home buyers are taking a record share of property purchases, with current market conditions giving them more choice and, in many cases, better access to finance.
Cotality Chief Property Economist Kelvin Davidson told Trade Me the market was positioned relatively favourably for first home buyers. Sales activity has been drifting slightly lower, listings remain elevated and property values have continued to ease.
Values are now around 18% below their January 2022 peak, although still about 16% above pre-Covid levels in March 2020.
“Although these conditions may not be pleasing a lot of property owners or sellers, there are always two sides to the housing coin and it’s a great time to be a buyer,” Mr Davidson said.
First home buyers appear to be responding. They accounted for a record market share of more than 28% of property purchases in the second quarter of 2026, with the trend extending beyond the main centres.
Why first home buyers are gaining ground
Lower prices and a larger pool of listings are helping, but several other factors are also supporting first home buyers.
KiwiSaver withdrawals are playing an important role in helping many buyers assemble a deposit. At the same time, banks have money available to lend and some borrowers are making use of low-deposit lending allowances.
Under current loan-to-value ratio settings, banks can allocate up to 25% of new owner-occupier lending to borrowers with less than 20% equity.
Reserve Bank lending data for June showed just how significant that flexibility has become – 55% of first home buyer loans were written with deposits below 20%.
Mr Davidson cautioned that buying a first home is still challenging, and that some would-be first home buyers still cannot make the numbers work.
For prospective buyers, the key lesson is that a 20% deposit is not always essential and the current market may offer more options than they realise.
If you know first home buyers who want to understand their borrowing capacity, deposit options or how KiwiSaver could fit into their plans, we’d be grateful if you could put them in touch with us.
