First-time buyers continue to purchase property at near record levels. Photo / 123rf
First-home buyers continue to dive into the property market as lower interest rates save the average newcomer around $10,000 a year compared with two years ago.
The latest Cotality-Westpac First Home Buyer Report found 27.5% of property sales in the first quarter of 2026 went to buyers new to the market – just short of the record 28.2% set in the final three months of last year.
Lower property values and reduced mortgage costs have contributed to favourable conditions for first-home buyers.
The average one-year fixed mortgage rate being paid in April 2026 dropped to 5.29%, compared with 7.67% in April 2024 and 5.68% a year ago.
Based on an average-price first home with a 90% mortgage fixed for one year and a term of 20 years, home owners have seen a drop of around $906 in minimum monthly payments compared with April 2024, and around $142 a month compared with last year.
Westpac senior economist Satish Ranchhod said falls in the Official Cash Rate (OCR) have been especially important for the property market.
“For those looking to get into their first home, lower mortgage rates have made it much easier to get a foot on the property ladder,” he said.
“The latter part of 2025 saw fixed-term mortgage rates falling to their lowest level in close to four years.
“While mortgage rates have risen more recently, they remain well down on the highs that we saw in the wake of the pandemic.”
Ranchhod said first-home buyers were also getting more bang for their buck.
“There are large numbers of properties available for sale right now. That’s meant first-home buyers have been able to get into larger or stand-alone homes with only a modest lift in purchase price,” he said.
But the Middle East conflict was “casting a long shadow” across the New Zealand economy.
“Inflation is again rising rapidly, and it’s likely to linger well above the [Reserve Bank’s] target range for an extended period.
“Combined with the related increases in uncertainty, those pressures will be a drag on economic activity and employment over the coming months.”
This leaves the Reserve Bank (RBNZ) with a challenging balance act, Ranchhod said.
“Earlier interest rate hikes might help limit the risk that we see a more sustained rise in inflation.
“However, the RBNZ is also very mindful that higher interest rates now would weigh on economic activity at a time when the labour market is already soft.”
Kelvin Davidson, Cotality NZ chief property economist, said the availability of high loan-to-value-ratio (LVR) lending remained one of the most important structural supports for first-home buyers.
“Many first-home buyers don’t need a 20% deposit, and that’s been a significant factor in sustaining activity,” he said.
“Combined with KiwiSaver access, the pathway into ownership is more accessible than it appears.”
Davidson said as other buyer groups begin to return to the market in larger numbers, first-home buyers’ share of activity may ease from its current highs.
“However, in a gradually busier market they are still completing more purchases in absolute terms, and the conditions underpinning that trend are unlikely to disappear overnight.”
Meanwhile, the average age of first-home buyers last year fell from 36 to 35 years old, according to Westpac’s borrower data.
However, the average age remains higher in Auckland (37), reflecting lingering affordability pressures compared with lower-priced regions.
First-home buyers were paying a median price of $900,000 in Auckland, compared with the Bay of Plenty ($733,000), Wellington ($730,000), Tasman ($712,000) and Waikato ($695,000), the report said.