New Zealand’s property market has entered 2026 with an interesting shift: first home buyers are now the dominant force, accounting for a record 28.8% of all property purchases in December 2025! This milestone caps off a strong year for aspiring homeowners and signals a fundamental change in who’s actively buying property in New Zealand.
But what’s behind this surge? And more importantly, if you’re thinking about buying your first home, what does this mean for you?
The Numbers Tell a Compelling Story
According to Cotality’s latest Monthly Housing Chart Pack, first home buyers didn’t just edge past previous records—they’ve cemented their position as the most active buyer group in the market. The December quarter of 2025 saw first home buyers account for 28.4% of purchases overall, with the actual number of completed deals remaining solid throughout the period.
This is a quite a shift from previous years when investors and existing homeowners dominated the market. So what’s changed?
Three Key Factors Fueling the First Home Buyer Boom
1. Mortgage Rates Have Become More Accessible
Mortgage rates have eased significantly from the peaks of 2022-2023. The Reserve Bank’s Official Cash Rate currently sits at 2.25%, and while some fixed rates have been creeping up recently due to inflation concerns, overall borrowing costs remain considerably more manageable than they were 18-24 months ago.
For many first home buyers, this easing has been the difference between being able to service a mortgage and being priced out entirely. Monthly repayments that seemed out of reach in 2023 are now achievable for households with stable incomes.
2. KiwiSaver Is Proving Its Worth
KiwiSaver’s First Home Withdrawal scheme continues to be a game-changer for aspiring homeowners. Access to your KiwiSaver funds—plus the potential for a First Home Grant of up to $10,000 for individuals or $20,000 for couples—can make a substantial difference when you’re trying to scrape together a deposit!
For many first home buyers, KiwiSaver represents years of disciplined saving for your first home deposit that suddenly becomes accessible when they’re ready to make the leap into homeownership. Combined with contributions from partners or family members, this can bridge the gap between renting and owning.
3. Low-Deposit Lending Allowances Are Opening Doors
One of the most significant barriers for first home buyers has traditionally been the deposit. While the standard lending criteria typically require a 20% deposit, banks are allocated low-deposit lending allowances that enable them to lend to borrowers with lower deposits. Ask one of our lenders if you can get an even lower deposit!
These allowances have been instrumental in helping buyers who have good incomes and solid financial habits but haven’t had years to accumulate a large deposit. Banks have been using these allowances strategically, and first home buyers—who are often viewed as lower risk than investors—have been prime beneficiaries.
What This Means for Aspiring First Home Buyers
If you’ve been sitting on the fence about buying your first home, here are some key takeaways:
The Window May Be Limited
While conditions are currently favourable, they won’t stay this way forever. Interest rates are expected to remain relatively stable through 2026, but inflation concerns could bring rate hikes forward. If you’re in a position to buy, waiting for “perfect” conditions later in the year, may mean missing the opportunity altogether.
Your Competition Is Real
With first home buyers making up almost 30% of the market, you’re not alone in your search! This means desirable properties in popular areas will likely attract multiple offers. Being prepared with pre-approval and having your finances in order is more important than ever.
Get Expert Advice
Navigating the first home buying process can be complex, from understanding your KiwiSaver eligibility to finding a lender who’ll work with a lower deposit. A good mortgage adviser (hello Priority Home Loans!) can help you understand your options, compare rates across multiple banks, and structure your loan in the most beneficial way.
Don’t Overextend Yourself
Just because you can borrow a certain amount doesn’t mean you should. Remember to factor in all the costs of homeownership—rates, insurance, maintenance—and leave yourself a buffer for unexpected expenses or potential interest rate increases down the track.
How We Can Help
If you’re part of the record number of Kiwis considering your first home purchase in 2026, start by:
- Checking your KiwiSaver balance and eligibility for the First Home Withdrawal and First Home Grant
- Getting your finances in order—pay down high-interest debt, build your savings, and improve your credit score
- Speaking with a mortgage adviser to understand how much you can realistically borrow and what deposit you’ll need
- Researching the market in areas where you’d like to live, so you understand pricing and what’s available
- Getting pre-approved for a mortgage before you start seriously house hunting
Our Priority Home Loans mortgage advisors will help you:
- Gather everything you need together to get pre approval from a bank
- Understand the current market
- Advice and tips to best position yourself as a first time home buyer! Exciting!
We are here to help you
OUR OFFICE
67 Norton Road, Frankton, Hamilton 3204
Monday – Thursday 9.30am to 4.00pm
Friday 9.30am to 3.00pm