A flurry of first-home buyers have hit the Rotorua property market driven by historically low interest rates and high rents, experts say.
Banks are also offering sweeteners to seal the deals including thousands of dollars in cash-back incentives and overseas holidays.
Figures from the Inland Revenue show 616 Rotorua first-home buyers collectively withdrew $14.2 million last year compared with 540 first-home buyers that withdrew $11.2m in 2018.
Financial discipline and moving back home for 18 months enabled Adam Grant to buy his first home - a recently renovated three-bedroom, one office house - in November.
The 21-year-old said his house in Pukehangi had a rental value of $520-$560 when he bought it but his mortgage was less than that at $500 a week.
Grant, an electrician, said he was fortunate to have a good job, a trade behind him and no student loan. And although he did not qualify for the first-home owners grant of up to $5000 because his house was more than $400,000 he did use up $25,000 he had in KiwiSaver.
Grant amassed the rest of his $57,000 deposit while paying board to his dad by being smart with his money and saving every cent.
''I was able to save a lot more money than I would have flatting by not going out and not eating out or going away on any trips.''
In the future Grant hoped to build up the equity in his home, which he shared with one flatmate, in order to buy another but at the moment he was content in the knowledge he had fulfilled a dream.
''It is very nice going to my house and not a flat or someone else's house.''
Ownit Rotorua manager and registered financial adviser Hayley Hubbard said there had been a surge of urgency in the past few weeks and in the lead up to Christmas.
First-home buyers had increased and she said expensive rents combined with the rental shortage and landlords selling up had motivated some people to buy.
Low interest rates were good but ''I think the need for housing is outweighing the interest rate at this stage''.
Simon Anderson, managing director of Realty Services, said without question in the past six months first-home buyers had started to come back.
In some instances, people were better off financially to pay the low interest rates instead of rent and a number of first-home buyers were using clever alternative ways of purchasing by teaming up or using family funding.
Anderson said there was a shortage of listings in the market compounded by buyer and investor activity.
BNZ Home Lending general manager Martin Elliott said it had helped 5000 New Zealanders own their first home in 2019 which was 25 per cent more than the year before.
First-home buyers had made a comeback to the market, he said, a moved helped by KiwiSaver deposits and family support.
"New Zealanders are benefiting from historically low interest rates and a competitive home loan market.''
At the moment BNZ was offering 18-month fixed-rate special at 3.39 per cent and customers were becoming savvy but ''incentives like iPads and trips overseas offered by other banks appear to have had little impact on the home loan customers choose''.
In Elliott's view, customers wanted the best deal and the best rates but BNZ was open to cash-backs dependent on a range of criteria including loan size and loan type.
But Kiwibank product manager for lending Richard McLay said a new home loan of $250,000 with 20 per cent equity would earn you a holiday for two for five nights in Fiji - or a cash alternative to a similar value.
The holiday package was proving to be popular, he said
A customer purchasing a property for $500,000 would typically require a $100,000 deposit but alternative options allowed the deposit to be as low as $50,000 and Kāinga Ora Kiwibank First Home Loan customers can qualify for a loan with a 5 per cent deposit.
ANZ corporate affairs external communications senior manager Stefan Herrick said it had more first-home buyers seeking loans in the final quarter of 2019 than 2018.
The bank was offering a $3000 cash contribution to first-home buyers who met the criteria.
All ANZ customers could apply for an interest-free home loan top-up, for up to $5000 for either insulation or heat pumps.
Herrick said a $500,000 loan would require a 10 per cent deposit but the bank recommended 20 per cent to avoid low equity premiums and to provide protection against market changes.
Westpac regulatory affairs and corporate legal services media manager Max Bania said new home loan lending may include cash offers to help cover costs including legal fees.
He said research it recently carried out found 44 per cent of parents would be prepared to act as a guarantor, and more than half would lend or gift money to their children to help them buy their first home.
Meanwhile Westpac Prebuilt was New Zealand's only dedicated lending product for prefabricated homes and its Family Springboard product allows first-home buyers' families to contribute by using their own home as security on the loan, he said.
"Westpac offers low deposit options but generally requires a minimum deposit of 10 per cent. Deposit requirements are assessed on a case-by-case basis.''
Meanwhile, OneRoof's latest property report reveals the median value of all properties in Rotorua in 2019 was up 9.6 per cent year on year to $455,000.