28% of homes sold in spring 2025 went to first-time buyers

1. The economic recovery is here

Last week’s Q3 GDP figures from Stats NZ were really encouraging, with the economy growing by 1.1% and the increase stemming from most sectors, including manufacturing, construction, and, of course, the primary sector. That being said, the upwards revision that had been tentatively expected for Q2 GDP didn’t materialise; in fact, it got a little worse (-0.9% revised to -1.0%).

All in all, then, this is clearly good news. But it doesn’t necessarily change the outlook for the OCR: we were in a deep economic hole, spare capacity is lingering, and the Reserve Bank is probably still watching and waiting.

2. Solid November-December data building on Q3 rise

Hot on the heels of Q3’s solid GDP figure, ANZ’s consumer confidence indicator picked up again in December, and the NZ Activity Index from Stats NZ also came in strong – the 2.7% annual rise for November was the highest since 3.9% in October 2022. In other words, it’s been tough, but things are now turning around very nicely on the economic activity front - all supportive for housing.

3. First-home buyers are still making hay

The Cotality Buyer Classification data shows that first-home buyers accounted for a touch more than 28% of property purchases over October and November combined, continuing a long hot streak. In fact, their market share hasn’t been below 25% for any quarter since the first three months of 2023, which is well above their long-term average of around 22%.

Mortgaged multiple property owners have also risen from a lull of around 21% at certain stages in 2023 and 2024 to about 25% now. That’s a touch above their long-term average, with the full return of mortgage interest deductibility a key factor for investors, as well as the reduced cashflow top-ups that stem from lower interest rates.

Cotality chief economist Kelvin Davidson: "One part of the inflation puzzle, which is definitely playing ball right now (unless you’re a landlord) is the rental market." Photo / Peter Meecham

4. Inflation isn’t dead yet (although property rents are subdued)

Speaking of interest rates, there’ll be plenty to watch on that front in 2026, given that price pressures in the NZ economy haven’t perhaps abated as much as hoped. Indeed, last week’s selected price indexes measure from Stats NZ – which is a monthly inflation gauge, covering just short of half the benchmark quarterly CPI – was a bit stronger than analysts expected. This will keep the policymakers at the Reserve Bank on their toes, especially in light of the recent rise in wholesale market interest rates, which Governor Breman has tried to talk down.

One part of the inflation puzzle, which is definitely playing ball right now (unless you’re a landlord) is the rental market. Stats NZ’s flow measure of rents (reflecting new tenancies) was down year-on-year every month from March to October and only edged up by 0.5% in November. Meanwhile, the stock measure (all tenancies) only rose by 1.4% in the year to November, the slowest pace since mid-2010.

5. If you’re interested, November mortgage lending data is due Tuesday

And finally, if you’re still at work, look out for the next set of RBNZ stats on Tuesday. I’ll be interested in the splits by loan to value ratio (in light of the looser rules from 1st December) and bank switching too – given the 1.5% cashback offers roared into life in November. Merry Christmas!

- Kelvin Davidson is chief economist at property insights firm Cotality