The five things you need to know about the housing market this week.
1. How long will the OCR hold?
Alongside many others, I was surprised that the RBNZ held the official cash rate unchanged at 2.75% last week. But barring some really soft economic activity data in the next few weeks, or a sudden end to the US-Iran conflict (and much lower fuel prices), the odds seem high that we’ll see the next OCR rise at the Monetary Policy Statement on December 9. A case of delayed, not cancelled.
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Indeed, the vote was a close-run thing, with a 4-3 split on the committee in favour of a hold rather than an increase. Broadly speaking, the members who voted for a rate hold highlighted a general view that measures of inflation expectations remain under control at least for now, and also that evidence suggesting firms are looking to increase margins and raise their selling prices remains fairly limited. Added to that, the economy isn’t yet firing on all cylinders either.
That being said, the record of meeting still noted that headline inflation is expected to spike from Q3’s 3.7% to 4.4% in Q4, and that “tighter monetary policy is likely to be required”. This appears to set the scene for that next rate rise in December, all things being equal.
For the property market, however, not a lot changes. It’ll still take some time for the economy to get back into its stride and, in the meantime, there also seems to be scope for mortgage rates to rise further too. As such, it seems unlikely that property sales activity or house prices are suddenly going to race away again anytime soon. It wouldn’t be a surprise to see more borrowers continue shifting towards longer-term fixed mortgage rates as insurance against even higher costs later.
2. First home buyers are smashing it
Last week also saw the release of the latest First Home Buyer Report from Cotality and Westpac. The report confirms that first-home buyers remain strong pretty much everywhere across the country, while they’re also getting more bang for their buck too (not necessarily paying a lot more than before but getting bigger houses), as well as staying active right across the different price tiers – not just entering at the bottom all the time. First-home buyers continue to take advantage of lower house prices, decent mortgage rates, access to KiwiSaver for at least part of the deposit, and also plenty of low-deposit finance available at the banks.
Highlight from the report include:
- First-home buyers accounted for 29.5% of all property purchases in Q3 2026, surpassing the previous record of 28.3% set just three months earlier.
- The number of purchases was also high, hovering around 25,000 on a 12-month rolling basis, levels last seen briefly during the post-Covid boom. This comes as wider housing market sales volumes have generally remained flat to falling.
- Standalone houses accounted for 76% of all first-home buyer purchases so far in 2026, up from 75% last year, while the median price was $715,000, up from $701,000 in 2025, but around $4000 below the level recorded in 2022.
- Greater Wellington was a standout, with first-home buyers grabbing just over 37% of purchases in the region so far in 2026. First-home buyers' market share also exceeded 30% in Hamilton and Auckland.
Cotality chief economist Kelvin Davidson: "First-home buyers remain strong pretty much everywhere across the country, while they’re also getting more bang for their buck too." Photo / Peter Meecham
3. Mortgage lending eases lower again in September
Even so, although banks have money to lend, that’s not necessarily the same as actual loans being approved. Indeed, overall volumes fell for the third time in a row in September (compared to same month last year), with house purchase activity, loan top-ups, and bank switching all easing downwards. Lending on interest-only terms is stable, and the neither the LVR or DTI speed limits are really being tested at present either. Partly that’s because the falls in house prices simply mean borrowers don’t generally need to stretch as much in terms of debt levels relative to the property’s value or their household income.
4. The ‘quiet’ rise in employment
It hasn’t been getting a huge amount of attention, but filled jobs just quietly continue to edge upwards, showing a 0.3% monthly lift in September, the third in a row. From the trough in October last year, filled jobs have risen by around 28,400 to roughly 2,363,200. This is obviously good news and we all hope that it continues – although for now, the rise in jobs hasn’t been enough to offset a bigger labour force, so the unemployment rate remains elevated.
5. A small drop in unemployment?
On that note, the key release this week will be Stats NZ’s official labour market figures for Q3 on Wednesday. And it may well contain a bit of good news, with the unemployment rate possibly edging down a touch, from 5.6% to possibly 5.5% (although still too high). As noted above, employment is edging higher, but much will depend on whether labour supply has also risen, via a combination of a bigger population and a higher participation rate. We’ll also have an eye on wage growth, because if it stays subdued, this may just cast a little more doubt over second-round inflation and whether or not the RBNZ will feel compelled to raise the OCR again in December.
- Kelvin Davidson is chief economist at property insights firm Cotality
