What the data actually shows about who is buying, what drives prices, and whether the conventional narrative holds up
This analytical brief tests common assumptions about the New Zealand residential property market against official and industry data. It does not provide financial, investment, or legal advice. All data series are attributed to their sources; the analysis and interpretation are the author's. This brief draws on publicly available data as of July 2026. Some series are indicative (read from published charts) rather than direct downloads from the source agency. See Section 12 for full methodology.
New Zealanders care deeply about the housing market. But much of what people believe about it does not match what the data actually shows. This brief tests several common assumptions about first-home buyers and what drives house prices, using official and industry data from Stats NZ, the Reserve Bank, REINZ, CoreLogic/Cotality, Kainga Ora, and LINZ.
Several widely held assumptions are not supported by the evidence. Overseas buyers were never a major factor behind national house prices. First-home buyers are buying more homes than ever, not fewer, reaching record levels. And the post-2021 price correction has been slow and steady rather than a crash, though this hides sharp differences between regions. The market first-home buyers face in mid-2026 looks quite different from the picture painted in most commentary. FHB participation is at record levels. Properties take longer to sell than they did a few years ago, but the pace has stabilised. Real prices are flat. And the number of new homes being built, while down from the peak, is still far above what was typical ten years ago.
First-home buyers accounted for 27.5 percent of all property purchases in 2025, with the quarterly share hitting 28.2 percent in Q4 2025, an all-time record in the Cotality (formerly CoreLogic) series.[1] In the twelve months to early 2026, approximately 24,800 properties were purchased by first-home buyers.[2] This runs counter to the common view that first-home buyers have been priced out. In fact, their share has risen steadily from around 21 percent in the 2017-2020 period to 25.8 percent in 2023, 26.1 percent in 2024, and 27.5 percent in 2025.[3]
Several things help explain this. Prices in the lower and middle parts of the market, where FHBs tend to buy, have fallen more from the 2021 peak than prices at the top end. Investors have pulled back. They faced higher deposit requirements (a 40 percent deposit from May 2021 to June 2023) and uncertainty over whether they could deduct mortgage interest from their rental income. And government support, mainly through KiwiSaver withdrawals and the First Home Loan scheme, has helped even after the First Home Grant ended in May 2024.[23]
The average first-home buyer in 2025 was 35.6 years old, up from approximately 34.4 five years earlier, according to Westpac lending records compiled in the Cotality-Westpac First Home Buyer Report.[2] Auckland FHBs are older on average (37 years), while Christchurch buyers tend to be younger (approximately 35). In early 2026, the national average edged down to 35 years, suggesting the trend toward older entry may be stabilising.
The median price paid by FHBs in 2025 was approximately $700,000, roughly $87,000 below the national median of $786,977.[1] In Auckland, the FHB median was approximately $903,000 in early 2026, reported as $127,000 below the overall Auckland median in the Cotality-Westpac data for Q1 2026.[2] This gap between FHB and overall median prices is consistent with FHBs purchasing smaller, lower-value properties and, to some extent, purchasing in more affordable suburbs.
The picture on deposits is mixed. Analysis of RBNZ mortgage lending for the year to June 2024 found the average FHB mortgage had a deposit of 29 percent, well above the 20 percent conventional requirement or the 5 percent First Home Loan scheme minimum.[28] However, by January 2026, a record 51.8 percent of FHB loans were low-equity (below 20 percent deposit), up from 31.3 percent in January 2024.[29] The average low-equity FHB loan in January 2026 was $656,148. KiwiSaver withdrawals have become more important, with the total amount withdrawn for first-home purchases reaching a record $1.8 billion in the year to 31 March 2025 (42,811 members), and average withdrawal reaching nearly $41,000.[21]
KiwiSaver first-home withdrawals have cumulatively exceeded $11 billion since the scheme began in 2010, according to the FMA KiwiSaver Annual Report 2025.[21] The year to 31 March 2025 saw a record total of nearly $1.8 billion withdrawn. The average withdrawal of approximately $41,000 is material: for a median FHB purchase of $700,000 with a 20 percent deposit ($140,000), KiwiSaver provides roughly 29 percent of the required deposit.
The First Home Grant, which provided up to $10,000 for new builds and $5,000 for existing homes, was discontinued from 22 May 2024. Over its lifetime (from April 2015 to December 2024), it paid approximately $644 million in grants.[22] The First Home Loan scheme, which allows purchases with a 5 percent deposit backed by Kainga Ora underwriting, remains active. House price caps were removed from June 2022, and uptake has risen steadily since.[23]
The national median house price rose from approximately $551,750 in December 2017 to a peak of $925,000 in November 2021, an increase of approximately 68 percent over four years.[8] The REINZ House Price Index peaked around the same time and as of February 2026 stands at 3,652, 14.6 percent below its 2021 peak.[11] The HPI was essentially flat year-on-year as of February 2026.[30]
The price cycle had three phases. From 2017 to mid-2020, prices rose moderately, supported by low but not zero interest rates and steady population growth. From mid-2020 to late 2021, prices rose at an annual rate of over 25 percent. This was fuelled by the OCR being cut to 0.25 percent, the removal of deposit limits, the Reserve Bank's bond-buying programme, and government stimulus spending. From late 2021, all of these conditions reversed (the OCR climbed to 5.50 percent by May 2023, deposit limits came back and were tightened, and migration swung from negative to a record high before slowing again). Prices fell about 15 to 16 percent from the peak, and somewhat more after accounting for inflation.
The national figures conceal a sharp regional split. Auckland and Wellington have experienced the largest corrections from peak, with Auckland's HPI approximately 22 percent below its 2021 peak and Wellington's approximately 26 percent below.[9] Auckland's median price, which peaked around $1.25 million in 2021, stood at approximately $1,015,000 in December 2025. Wellington's median fell from approximately $945,000 to $770,000 over the same period.[10]
In contrast, Canterbury and Southland have surpassed their 2021 peaks. Christchurch's median hit a record $725,000 in December 2025, and Canterbury's HPI has made new all-time highs. Southland's median rose 6.3 percent year-on-year in 2025 to $489,000.[9] Several things explain the gap: the post-earthquake rebuild in Christchurch created ongoing construction activity and housing supply; the southern regions started from lower base prices and had less extreme pandemic-era overvaluation; and internal migration has favoured the South Island.
How fast properties sell (or do not) tells you more about what is happening right now than prices do, because prices tend to lag behind changes in demand. The national median days to sell, a key measure of how quickly the market is moving, rose from 31 days in 2021 (reflecting a market where properties sold within a month of listing) to 60 days in February 2023, the highest outside the April 2020 COVID lockdown.[8] Since then, days to sell have stabilised at 40 to 55 days, with the 2025 annual median at 44 days, unchanged from 2024. This is roughly a week longer than the 2018-2019 average of approximately 38 days, indicating a market that remains balanced rather than frenzied.
Sales volumes tell a similar story. Annual sales peaked at approximately 88,600 in 2021, collapsed to approximately 62,400 in 2022 as interest rates rose, troughed at approximately 63,400 in 2023, and have since recovered to 80,655 in 2025 (up 10.3 percent from 2024).[9] Sales are running at roughly the same pace as before COVID rather than the elevated levels of 2020-2021.
A big change in the market has been the shift toward medium-density housing. Townhouses and units now rival standalone houses in monthly building consent volumes. This has implications for pricing and liquidity by dwelling type.
Industry commentary (including from REINZ and real estate agencies) has suggested that units and townhouses, particularly in Auckland, are taking longer to sell and facing larger discounts from asking price than standalone houses. This is consistent with the large increase in townhouse supply relative to demand in some submarkets, and with buyer preferences that still favour standalone houses. However, comprehensive data on days-to-sell and price discounting by dwelling type is not publicly available from REINZ without paid access. The CoreLogic/Cotality stratified price data does show that the lower quartile of the market (where units and townhouses are concentrated) has underperformed the upper quartile in Auckland and Wellington, consistent with this observation, though it is also true that the lower quartile tends to be more rate-sensitive and more affected by investor withdrawal.
Among the most widely cited explanations for New Zealand's high house prices has been the role of overseas buyers, particularly from China and Australia. This concern was the primary justification for the Overseas Investment Amendment Act 2018, which banned most foreign buyers from purchasing existing residential property from 22 October 2018.
The Stats NZ Property Transfer Statistics, which classify home transfers by the citizenship and visa status of buyers, provide the most direct test of this claim.[4] In the March 2018 quarter (the pre-ban peak), 3.3 percent of home transfers involved buyers with no New Zealand citizenship or resident visa.[7] In absolute terms, this was approximately 1,083 transfers nationally. In Auckland, the figure was 7.3 percent, and in Waitemata (Auckland's inner-city ward), it reached 18.7 percent. In Queenstown-Lakes, it was 9.7 percent.
After the ban took effect, the overseas buyer share collapsed. By the March 2019 quarter, it had fallen 81 percent to 0.6 percent.[6] Since 2021, it has been consistently 0.3 to 0.4 percent. In the year to June 2024, there were 513 such transfers nationally.[5] In Auckland, the share fell to 0.5 percent; in Waitemata, from 18.7 percent to 3.5 percent.
The timeline is revealing. The overseas buyer share peaked at 3.3 percent in March 2018 and had already fallen to 2.0 percent by September 2018 (before the ban took effect in October 2018), suggesting that anticipation of the ban and prior consultation may have already begun to reduce foreign purchasing. National house prices, measured by the REINZ median, rose from $560,000 (December 2018) to $925,000 (November 2021), an increase of 65 percent, while the overseas buyer share simultaneously fell from 3.3 percent to under 0.5 percent.
The evidence is clear: overseas buyers were not a material driver of national house price growth, even when they were active. Their share nationally was small (3.3 percent at its absolute peak), and the price surge of 2020-2021 occurred entirely after their effective removal from the market. This does not mean overseas buyers had no effect, particularly in concentrated submarkets like central Auckland and Queenstown, where their presence was larger and where the ban may have had a localised cooling effect. But the idea that foreign buyers were a primary cause of New Zealand's housing affordability challenges is not supported by the data.
This finding is consistent with the academic assessment. Tran Cao Bao (2019), writing in the Canterbury Law Review, concluded that "the causality between foreigners' house ownership and the housing crisis is not well established" given the "low rate of foreign ownership", and noted that it was "unclear how tightened rules on such a low rate of foreign ownership will improve the unaffordability and the locals' capability to buy homes."[24]
The Stats NZ data excludes corporate-only transfers (roughly 9 to 11 percent of transfers), and trusts are classified by trustee citizenship rather than beneficiary citizenship. If overseas-controlled companies or trusts with overseas beneficiaries account for a material share of these excluded categories, the overseas buyer share would be understated. However, comparing the periods before and after the ban is still valid: if overseas-controlled entities were a significant factor, they would have faced the same restrictions as individuals, and the large drop in the measured overseas share should still show the direction and approximate size of the effect.
If overseas buyers were not the driver of house prices, what was? The data points to the interest rate cycle as the biggest factor, working alongside lending rules, tax settings, and migration.
The OCR cycle was extreme. The RBNZ cut the OCR from 1.00 percent to 0.25 percent in March 2020 as an emergency COVID response, and held it there until October 2021.[12] One-year special mortgage rates fell to approximately 2.49 percent. The OCR then rose to 5.50 percent by May 2023, and 1-year special mortgage rates peaked at approximately 7.06 percent.[13] This was followed by an aggressive cutting cycle to 2.25 percent by November 2025, with 1-year special rates falling to approximately 4.38 percent. In July 2026, the RBNZ hiked back to 2.50 percent.
The correlation between the OCR cycle and the house price cycle is strong, though it is not automatic. The 2020-2021 price surge occurred during the period of near-zero interest rates. The 2022-2023 correction tracked the rapid tightening. But the recovery has been muted despite the OCR falling from 5.50 percent to 2.25 percent: prices are broadly flat, not rising, even with mortgage rates well below their peak.
Two macroprudential tools now shape the mortgage market more than at any point in New Zealand's history. Loan-to-value ratio (LVR) restrictions have been in place since October 2013, with their intensity varying over the cycle.[14] The key recent events: LVR restrictions were removed entirely in May 2020 (contributing to the price surge), reinstated in March 2021, and progressively tightened through 2021 before being eased in stages from June 2023. As of December 2025, the settings allow banks to lend up to 25 percent of new owner-occupier loans above 80 percent LVR and 10 percent of investor loans above 70 percent LVR.
Debt-to-income (DTI) restrictions were activated on 1 July 2024, a major change to the lending framework.[15] Banks may lend no more than 20 percent of new loans at DTI exceeding 6 for owner-occupiers and 20 percent at DTI exceeding 7 for investors. The DTI framework is designed as a "speed limit" rather than a hard cap, allowing some high-DTI lending while constraining aggregate risk accumulation.
How these two rules interact matters. When interest rates fall, households can afford larger mortgages, but the DTI limit puts a ceiling on how far this can push up prices. Even when monthly repayments are affordable, the total debt cannot exceed six or seven times income. This is a big reason why the steep OCR cuts of 2024 to 2025 did not set off another price boom.
Oct 2013: First introduced (10% speed limit above 80% LVR)
Jan 2019: Eased (20% above 80% for owner-occupiers, 5% above 70% for investors)
May 2020: REMOVED entirely (COVID response)
Mar 2021: Reinstated to pre-COVID levels
May 2021: Investor LVR tightened to 5% above 60% (40% deposit)
Nov 2021: Owner-occupier tightened to 10% above 80%
Jun 2023: Eased (15% above 80% OO, 5% above 65% investor)
Jul 2024: Further eased + DTI introduced
Dec 2025: Current settings (25% above 80% OO, 10% above 70% investor)
Source: RBNZ LVR restrictions timeline[14]
Building consents, a leading indicator of new housing supply, peaked at approximately 49,900 in 2022, the highest since the 1970s.[20] Auckland accounted for 21,301 of that total, reflecting both the post-Unitary Plan supply response and the pandemic-era demand stimulus.[19] Consents then fell sharply to 33,600 in 2024 as higher interest rates and construction cost pressures dampened developer appetite, before recovering to 36,619 in 2025. In the year to May 2026, consents reached 39,737, up 19 percent from the year to May 2025.[18]
The composition of new supply has shifted structurally. Townhouses and units now account for a substantial share of consents, rivalling standalone houses in major urban centres. In Auckland, the share of multi-unit dwellings in new consents has risen substantially since the Unitary Plan became operative in 2016. This shift toward medium-density supply is one of the most important shifts in the NZ housing market in decades. Over time, it could help make housing more affordable by adding more lower-cost homes, but it also risks creating too many townhouses in some areas.
Construction costs have moderated. The Cordell Construction Cost Index (CCCI) reported annual growth of just 1.1 percent in Q4 2024, well below the long-term average of approximately 4 percent and dramatically below the record 10.4 percent annual increase in Q4 2022. The Stats NZ Capital Goods Price Index for residential dwelling units rose 1.4 percent in the year to December 2025. This cost moderation should support a recovery in building activity, though labour shortages and construction sector insolvencies remain a constraint.
Net migration is the most volatile demand-side driver of New Zealand's housing market. The annual net migration series tells a story of extremes: from a steady +50,000 to +70,000 in the late 2010s, to a COVID-driven collapse (negative 15,000 in 2021), then a record surge to +127,951 in 2023, before normalising to approximately +14,000 in 2025.[16]
The composition of migration matters for housing demand. Throughout the period, New Zealand has consistently experienced a net loss of its own citizens (approximately 40,000 annually in recent years), offset by a net gain of non-NZ citizens. The non-NZ citizen net inflow peaked at over 171,000 in 2023 before falling to approximately 54,000 in 2025.[17] This matters because non-NZ citizen arrivals tend to rent first, which pushes up demand for rental properties rather than owner-occupied homes.
The sharp decline in net migration from the 2023 peak removes a significant demand-side support that contributed to the earlier price surge. However, migration is notoriously difficult to forecast and is sensitive to relative economic conditions between New Zealand and Australia, as well as to government policy settings on visa categories and caps.
New Zealand treats housing more favourably for tax purposes than most other developed countries. There is no general capital gains tax, and from 1 April 2025, rental property owners can once again deduct all of their mortgage interest costs. This makes geared property investment very attractive compared to other investments. The bright-line test, which taxes capital gains on properties sold within a specified period, was extended from 2 years to 5 years (2018), then to 10 years (March 2021), and then returned to 2 years (July 2024). At its most restrictive, the 10-year test captured a non-trivial share of investment property sales. At 2 years, it largely exempts the typical buy-and-hold investor.
The removal of interest deductibility (announced March 2021, phased in over four years) and its subsequent restoration (announced 2023, phased back in from April 2024 to April 2025) created significant policy uncertainty for investors. This uncertainty, combined with tighter LVR restrictions on investors (40 percent deposit requirement from May 2021 to June 2023) and falling prices through 2022-2023, contributed to a decline in investor activity. The partial retreat of investors from the market is one factor behind the rising FHB share, as FHBs faced less competition at the lower end of the market where both groups tend to be active.
Tax and interest rates interact in important ways. When rates are low and interest is fully tax-deductible, the true cost of borrowing for investors is much less than the advertised rate. With the OCR at 2.50 percent and the 1-year special rate at approximately 4.67 percent (June 2026), and with full interest deductibility restored, the effective after-tax borrowing cost for an investor on the 33 percent marginal rate is approximately 3.13 percent. This is not low enough to generate positive gearing on most rental properties at current yields (gross rental yields in Auckland are approximately 3 to 4 percent), but it reduces the cash flow shortfall relative to the period when deductibility was being phased out.
Several points are important to keep in mind when reading this analysis.
Data limitations. The REINZ HPI regional index levels are not publicly available; regional price comparisons rely on median prices, which can be affected by changes in the composition of sales. The CoreLogic/Cotality FHB classification, based on name-matching against land registry records, may misclassify some buyers (for example, a buyer who previously owned property through a trust or company may appear as a first-home buyer).[1] Stats NZ property transfer statistics exclude corporate-only transfers from the overseas buyer denominator, and trusts are classified by trustee citizenship, both of which could understate the overseas buyer share.[4]
Causation. Where this brief notes that two things moved together (OCR changes and house prices, for example), it does not claim one caused the other. The housing market is complex, and no single factor can explain everything. The 2020-2021 price surge occurred during a period of near-zero interest rates, but also during strong fiscal stimulus, a temporary LVR holiday, supply chain disruption in construction, and a shift in household preferences toward larger homes. Isolating the effect of any one factor is beyond the scope of this brief.
Competing explanations. The supply-side view, which attributes high house prices primarily to restrictive land-use regulation and insufficient construction, has strong empirical support in the New Zealand context (Greenaway-McGrevy and Phillips, 2023; Greenaway-McGrevy, 2025).[25][26] The credit-cycle view emphasises the role of mortgage lending booms in driving price cycles (Jorda, Schularick, and Taylor, 2016).[27] The tax-structure view points to the absence of CGT and the favourable treatment of leveraged property investment. These explanations are not mutually exclusive, and all three likely contribute to observed outcomes, with their relative importance varying over time.
The dwelling-type divergence observation. The claim that units and townhouses are discounted more heavily and take longer to sell than standalone houses has some support from industry commentary but is difficult to test rigorously without access to the full REINZ stratified dataset by dwelling type. What is clear from available data is that the lower quartile of the market (where multi-unit dwellings are concentrated) has underperformed since 2022, which is consistent with the observation. But this could also reflect the retreat of investors from the lower end of the market, rather than a fundamental shift in buyer preferences away from medium-density housing.
Overseas buyer data caveats. The Stats NZ overseas buyer figures, while the best available measure, have known limitations. Corporate and trust structures can obscure beneficial ownership. The "corporate only" category, representing 9 to 11 percent of transfers, may include overseas-controlled entities. If even a modest share of these corporate transfers represented overseas buyers, the true overseas share would be higher than the 0.4 percent measured, though still unlikely to exceed low single digits nationally.
Several questions remain that deserve closer study with more detailed data.
Dwelling type divergence. The most pressing research question is whether the shift toward medium-density supply has outstripped demand for townhouses and units in specific submarkets, and whether this is producing a persistent price discount relative to standalone houses. This could be tested with CoreLogic or REINZ stratified price data by dwelling type, combined with consent data by dwelling type at the SA2 or meshblock level.
Investor activity and tax settings. The restoration of full interest deductibility from April 2025 provides a natural experiment. Tracking investor market share before and after this change, controlling for the OCR cycle, could provide credible estimates of the effect of interest deductibility on investor demand and, through that channel, on house prices.
First-home buyer outcomes. The rising FHB share raises questions about the sustainability of these purchases. With a record 51.8 percent of FHB loans being low-equity in January 2026, and with the average FHB age at 35 to 36, a cohort of FHBs is entering homeownership with less equity buffer and at a later life stage than previous generations. Tracking mortgage arrears, negative equity rates, and resale outcomes for the 2023-2025 FHB cohort over the next five years would provide valuable evidence on the risks of low-deposit lending.
Regional divergence. Canterbury's stronger performance since 2022, compared with Auckland and Wellington, offers a useful case study for understanding what drives regional price differences. The post-earthquake rebuild, lower base prices, different industry mix, and internal migration patterns all play a role. A systematic comparative analysis could help disentangle these factors.
DTI effectiveness. Little is known yet about how much it limits house price growth, because it has only been active since July 2024. The key test is whether future OCR cuts push up prices less than they did before the DTI rules came in.
The data behind each figure is available for download below. The datasets include three kinds of series: indicative annual points read from official published data (used for multi-year comparisons), author computations (where noted), and event-based comparisons (the LVR timeline). For authoritative, full-resolution data, use the official source links provided in the references section and in the sources and methodology file.
Category 1: Indicative points read from an official series (faithful to the published series but not the full-resolution file; link the source for the full data).
Category 2: Author computation (data compiled from multiple public sources into a consistent annual series).
Category 3: Illustrative timeline (event-based LVR policy dates).
All source URLs were verified as live on 11 July 2026. Datasets with approximate values are marked with ~ in the source column of the CSV.
Figure 1 (FHB share). Cotality/CoreLogic buyer classification based on name-matching. Annual averages from published reports.
Figure 2 (FHB characteristics). Age from Westpac lending records (Cotality-Westpac FHB Report). Price from Cotality/CoreLogic. KiwiSaver withdrawals from FMA/IRD.
Figure 3 (National prices). REINZ median price from December of each year unless noted. HPI from REINZ SPAR methodology launched April 2017. Pre-2017 HPI not directly comparable.
Figure 4 (Regional prices). Annual medians from REINZ data via interest.co.nz and REINZ press releases. Auckland, Wellington, Christchurch approximate. National from REINZ official releases.
Figure 5 (Days to sell). Median days from listing to unconditional sale, REINZ via interest.co.nz. Annual median calculated from monthly values.
Figure 6 (Sales volumes). Sum of monthly unconditional sales counts, REINZ via interest.co.nz. 2025 total from REINZ 2025 Year in Review (80,655).
Figure 7 (Overseas buyers). Stats NZ Property Transfer Statistics. Percentage of home transfers where none of the buyers held NZ citizenship or a resident visa.
Figure 8 (Rates). RBNZ OCR history and B21 special mortgage rate series. Annual snapshots use December figures.
Figure 9 (Building consents). Stats NZ Building Consents Issued. Annual calendar year totals. 2016-2022 approximate, 2021 and 2024-2025 from Stats NZ press releases.
Figure 10 (Migration). Stats NZ outcomes-based measure (12/16-month rule). Calendar year totals. 2025 provisional.
| Dataset | Figure | Download |
|---|---|---|
| Sources and methodology for all series | All figures | figure_sources_and_methodology.csv |
| FHB share of purchases | Figure 1 | figure1_fhb_share_purchases.csv |
| FHB characteristics | Figure 2 | figure10_fhb_characteristics.csv |
| National median price and HPI | Figure 3 | figure2_national_prices.csv |
| Regional median prices | Figure 4 | figure3_regional_medians.csv |
| Days to sell | Figure 5 | figure4_days_to_sell.csv |
| Sales volumes | Figure 6 | figure5_sales_volumes.csv |
| Overseas buyer share | Figure 7 | figure6_overseas_buyer_share.csv |
| OCR and mortgage rates | Figure 8 | figure7_ocr_and_mortgage_rates.csv |
| Building consents | Figure 9 | figure9_building_consents.csv |
| Net migration | Figure 10 | figure8_net_migration.csv |
| LVR restriction timeline | Supporting data | lvr_timeline.csv |
| Data construction notes and full methodology | All figures | README.md |