New figures from retail bank Westpac show a surge of activity from first home buyers outside of Auckland.
In the year ending September 30, the number of mortgages issued by the bank to first home buyers rose 12 per cent across New Zealand to 5553.
The increase was particularly pronounced in Manawatu-Wanganui, Marlborough, Nelson, Northland, Southland, Tasman, Wellington and the West Coast, with volumes rising more than 20 per cent. Tellingly, loans to first-time buyers in Auckland dropped 5 per cent.
Westpac NZ chief executive, David McLean, says: "The housing market has slowed and that's good for New Zealand. We need a sustained period of flatter prices so that as incomes grow, houses become more affordable.
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"In many places we're seeing a welcome increase in young New Zealanders getting a foothold on the housing ladder.
"It's pleasing to see plenty of activity in the regions, which are the engine room of the New Zealand economy.
"In Manawatu-Wanganui for example, mortgages issued by Westpac to first home buyers rose 26 per cent, while Northland had a 44 per cent increase. Marlborough had a whopping 74 per cent increase."
Plenty of people also had their eye on Wellington, with Westpac mortgages issued to first home buyers rising 43 per cent year on year.
"These figures show buyers are flocking to Wellington," says McLean. "It's a different story in Auckland, where entering the market is still a challenge for many people.
"Having said that, analysts have noted a recent cooling in prices, meaning some first home buyers may now be reviewing their options in our largest city."
McLean says the Reserve Bank's loan-to-value ratio rules appear to have given first home buyers a foot in the door.