Auckland woman Tayla Clement always thought owning a home was out of reach – but now the 28-year-old and her partner have joined the record number of first-home buyers who purchased in the September quarter.
Economists have chalked the record – 27% of home purchases have been by first-time owners – up to lower interest rates, increased choice and favourable loan-to-value lending criteria.
Clement, who is now renovating her roughly $800,000 Orewa home, told the Herald she loved being able to make somewhere her own. And she says “there’s no better time to buy than now”.
“My partner brought up the idea of wanting to buy a house, and in my head, I had never really looked into it, never thought it was attainable,” Clement said.
“He was of the mindset of, ‘why not pay off our own mortgage rather than someone else’s?’
“I was just like, ‘oh, there’s no way we’re going to be able to afford anything’."
However, when she and her partner sought advice, on social media and from a broker, “one thing led to another and we were on the journey of buying our first home”.
She believed people her age often discounted the idea of buying because they may not understand the process. Along with more education and support, she also hoped falling interest rates would encourage more to buy.
“Even from the start of this year compared to now, interest rates have dropped so much, and they’re predicted to keep dropping.
“Hopefully we’re going to see a lot more first-home buyers getting into the market.”
Data from the Cotality-Westpac NZ First Home Buyer Report today shows 27.7% of property purchases in the September quarter were made by first-time buyers.
“In an environment where house prices and mortgage rates have both fallen, and resulted in better affordability, first-home buyers continue to fare well,” Cotality NZ’s chief property economist Kelvin Davidson said.
He said the market should remain favourable to first-home buyers in the near term.
It is a record share for first-home buyers and trumps the previous record of 26.9% in the December quarter of last year, the report said.
Specific figures for some regions and towns are higher than the national share. In Wellington, 36% of property purchases were made by first-home buyers, in Rotorua, it was 32% and in the southern Waikato and Timaru, it was 28%.
Home loans for first-home buyers are also at their highest level in more than three years. Loan-to-value ratios for first-home buyers have also nudged to 79%, up from less than 75% three years ago, Westpac’s lending data showed.
Davidson said the market was being shaped by factors benefiting first-home buyers, including increased choice and favourable loan-to-value rules.
“Overall, banks and borrowers are already operating below the current, lower loan-to-value speed limits, but first-home buyers are certainly making the most of the low-deposit finance that’s on offer,” Davidson said.
Westpac NZ senior economist Staish Ranchhod agreed.
“Activity [is] now at its highest level in more than three years. Lower interest rates mean some first-home buyers won’t need to raise as much equity, given that the same cash outflow will now service a larger loan,” Ranchhod said.
“Compared to this time last year, one-year fixed mortgage rates are nearly 150 basis points lower, while two-year fixed mortgage rates are around 250 basis points lower than in 2023. Those are big declines, and they’ve made the housing market a lot more accessible for would-be first-home buyers.”
While barriers to financing have eased, it was still taking first-home buyers longer than before to enter the market, the report said. The average age for first home buyers was 36, up from 34 before the Covid-19 pandemic hit.
The report also shows the median price they’re paying for property, $700,000, is lower than the national median house price of $770,000. Median prices are still higher than the lower quartile across all buyers of $585,000.
“Mortgage rates have fallen, KiwiSaver access for at least part of the deposit remains a strong support, and the loan-to-value spend limits are set to ease from December 1,” Davidson said.
He said conditions “should” remain favourable in the short term.
Granted, house prices may well start to rise again in 2026, but the pace shouldn’t be so strong that first-home buyers fall behind, Davidson said.
“We expect the Reserve Bank to cut the Official Cash Rate by 25 basis points at its November 26 meeting, justified by sluggish growth, rising unemployment, and modest underlying inflation,” he said.
Ranchhod said: “Over the year ahead, widespread mortgage rollovers on to lower rates will boost households’ spending power, suggesting the Official Cash Rate will likely move to an ‘on hold’ stance in 2026.”
Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.
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