The five things you need to know about the housing market this week.
1. Construction costs are starting to rise faster again
The latest Cordell Construction Cost Index showed construction costs rising 1.7% over the quarter and 4.8% annually. The quarterly increase was the fastest since Q4 2022, while annual growth was the strongest since Q2 2023.
The period of steadily easing construction cost pressures appears to be over. Builders are increasingly facing higher material, freight and fuel costs, with some evidence that those increases are being passed through to customers rather than absorbed.
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That's important because housing affordability isn't just about mortgage rates and house prices. The cost of building new homes matters too. If construction becomes more expensive again, it could ultimately affect both new-build demand and future housing supply.
2. First-home buyers are still doing the heavy lifting
The September Cotality Buyer Classification figures showed yet another record market share for first-home buyers. In September alone, 30.4% of purchases went to this group, while across the now-complete third quarter, their share was 29.5%. Both were record highs for the series. First-home buyers remain the market’s strongest buyer group, supported by improved affordability, abundant listings and reduced competition compared to previous cycles.
Movers remain very subdued, accounting for 24.2% of purchases over the quarter, close to the lowest levels recorded. This reflects caution among existing homeowners dealing with a high cost of living, higher mortgage rates and a vulnerable labour market.
Mortgaged multiple-property owners remain active but have not staged a dramatic resurgence. Their share rose from 22.1% in Q2 to 22.9% in Q3. Greater policy certainty around interest deductibility may support future investor activity, but higher mortgage rates and rising ownership costs remain significant constraints.
Cotality head of research Nick Goodall: "Affordability isn't just about mortgage rates and house prices. The cost of building new homes matters too." Photo / Supplied
3. Borrowers are showing renewed interest in one-year fixes
The Reserve Bank’s new mortgage lending data showed a small increase in the share of borrowers choosing one-year fixed terms.
The changes are modest, but they suggest some borrowers still value the flexibility of a shorter fixed term, even as others continue to seek protection against the risk of further rate rises.
Fixing choices do not provide a perfect guide to household expectations. They are also influenced by the rates banks are offering and borrowers’ individual circumstances. But they remain a useful indicator of how households are navigating an uncertain interest-rate environment.
4. Will net migration continue to recover?
This week we’ll get the August migration figures from Stats NZ (Wednesday). Annual net migration has been trending higher since August 2025, helped by rising arrivals and fewer departures. While I expect that broad direction to continue, it’s unlikely to provide significant demand to either the rental market or the broader housing market. We should also note the provisional figures can be volatile and subject to revision.
5. Inflation and activity data will set the tone next week
Friday’s BNZ-BusinessNZ Performance of Manufacturing Index and Stats NZ Selected Price Indexes will provide two useful reads on the wider economy.
The manufacturing sector has expanded for 14 consecutive months, although the pace slowed in August, with the PMI easing from 54.3 to 53.1. September’s result will show whether manufacturing has maintained that expansion or lost further momentum.
Meanwhile, the Selected Price Indexes will provide a timely update on monthly price pressures before the September-quarter Consumers Price Index is published on 22 October. That CPI release will be closely watched ahead of the Reserve Bank’s next OCR decision on October 28.
- Nick Goodall is head of research at property insights firm Cotality
