The five things you need to know about the housing market this week.
1. It continues to be a great time to be a first-home buyer
Cotality's latest First Home Buyer Report with Westpac confirms that first-home buyers (FHBs) remain a strong presence in the property market and are taking full advantage of soft conditions. Over the last 12 months, they bought 24,800 properties, and in the first quarter of this year, 77% of purchases were standalone houses.
The report also highlights that many FHBs were able to enter the market well above the lowest price point, even as the median purchase price increased from $700,000 in 2025 to $720,000 in 2026.
Start your property search
Most have been able to take advantage of flat prices, reduced mortgage rates, KiwiSaver access, and the low-deposit lending allowances. Indeed, Westpac’s lending records show a recent rise above 80% for the average LVR to first home buyers, while their average age has just dropped (35 recently versus about 36 in 2024).
Whichever way you cut it, the latest data continues the good news for FHBs. Those looking to purchase in the next little while will need to be conscious of the risks to mortgage rates (higher) and employment (lower), but if they’re confident about those factors and get the right advice, then the favourable window to buy looks set to remain firmly open.
2. The unemployment rate has fallen ... for now
Speaking of jobs, Stats NZ reported last week that the unemployment rate edged down from 5.4% in Q4 2025 to 5.3% in Q1 this year, on the back of a small lift in employment and a drop in the labour force participation rate (even though our working age population got a bit bigger) – i.e. demand for workers rose and the supply of labour didn’t react as strongly.
That being said, the risks to unemployment from Q2 onwards are obvious - and are unlikely to do much for household sentiment and house prices. The good news, however, could be that wage growth remains restrained and, to some extent, prevents second-round inflation and the need to combat it with higher interest rates.
Cotality chief economist Kelvin Davidson: "The favourable window to buy looks set to remain firmly open." Photo / Peter Meecham
3. Cashbacks were a win for borrowers
Meanwhile, the Reserve Bank’s latest six-monthly Financial Stability Report came and went pretty quickly last week, with no changes to the LVR or DTI rules. The report did note that property values remain near the top of the bank’s estimated sustainable range, suggesting that further (modest) falls could occur as interest rates rise.
The report also briefly discussed the cashback war at the end of last year and noted that all the bank switching really just benefited a small share of borrowers at the expense of the lenders. It estimates, assuming no offset from higher lending margins, that the offers cost banks about $100m in total; in other words, a windfall for those borrowers. Nice work if you got a cashback!
4. Two-year fixes remain popular
Of course, those offers won’t be quite as easy to get now, given that more people are set in a new cashback tie-in period anyway, and on top of that, we’re seeing more debt going longer too (i.e. having less flexibility to swap lenders without a large break fee). Indeed, the latest Reserve Bank figures show 55% of new loans in March were fixed for longer than 12 months, with 29% on a two-year term. In other words, after a long phase through 2024 and 2025 when going short was the strong option, borrowers are now fixing much longer again – as they look to get insurance against even further (potential) rate rises later.
5. Inflation data is back on the radar again
On Friday this week, Stats NZ will publish the April selected price indexes figures, which cover nearly half of the benchmark Consumers Price Index, which the Reserve Bank uses to set monetary policy. These figures will be watched closely, and it seems likely that there’ll be more pressure on fuel and airfares. This data also covers property rents, which seem likely to have remained sluggish.
- Kelvin Davidson is chief economist at property insights firm Cotality
