Recent data from Cotality and reports that buyers can snap up properties in a quiet market show a clear pattern. Overall property sale numbers are falling, yet first-home buyers are taking a bigger slice of the deals that are getting done. Mortgage Managers, a leading adviser for first-home buyers, is also reporting strong inquiry from Kiwis who see this as their best opportunity in years to move.
If you are saving a deposit or weighing up pre-approval, understanding why first-home buyers increase market share can help you decide whether to act now or wait.
A Soft Market With Less Competition
The housing market has cooled from the frantic post-pandemic years. Sales volumes are down, new listings are steadier, and price growth has flattened in many regions. That means:
Fewer multi-offer situations
Lower auction clearance rates
More homes sitting on the market for longer
In short, it is a quieter, less crowded market for buyers. When conditions feel uncertain, many existing owners choose to stay put rather than trade up. Investors can also step back if they worry about tax changes, weaker capital gains, or softer rents.
That leaves more room for first-home buyers to increase market share. Instead of competing with a long line of investors and upgraders, many first-home buyers can:
Take their time at open homes
Compare several properties
Negotiate on price and conditions
Mortgage Managers is seeing this shift first-hand. Advisers report that first-home buyers make up a growing share of new applications, with many clients surprised at how calmly they can approach open homes and negotiations.
Why First-Home Buyers Increase Market Share In These Conditions
When the market slows, the behavior of repeat buyers changes in ways that favour first-home buyers.
1. The “Lock-In” Effect For Existing Owners
Many homeowners fixed their mortgage at low rates a few years ago. Selling and buying again usually means a larger loan at a higher rate, so staying put feels safer. This lock-in effect reduces the number of upgraders and downsizers in the market and cuts the number of bids they place on starter homes.
2. Cautious Investors
Investors watch rents, interest costs, and tax settings closely. With talk of tax changes, slow population growth in some areas, and rental yields under pressure, many investors are sitting on the sidelines. Cotality’s buyer classification data shows investor purchases dropping while first-home buyers increase market share.
3. Stable Or Flat Prices
Flat prices do not help existing owners chasing big capital gains, but they can help new buyers plan with more confidence, as they are less worried prices will sprint away while they are still saving a deposit.
Together, these factors help explain why first-home buyers increase market share even when total sales are falling — and understanding how lenders assess risk can help you see why this phase can be a good time for first-home buyers to be active in the market.
What The Numbers And Experts Are Saying
Cotality’s latest figures show first-home buyers now account for close to three in ten purchases nationwide, up from already high levels last year. That makes them the single largest buyer group in the market.
Kelvin Davidson, Cotality’s chief property economist, describes this as steady, ongoing strength from new buyers rather than a collapse in other buyer groups:
“First-home buyers are showing steady, ongoing strength,” says Kelvin Davidson. “They are lifting the number of deals they do in a market where overall sales are shrinking.”
Economist Shamubeel Eaqub has also pointed out that some first-home buyers are keen to move before any further lift in interest rates. When borrowing costs could nudge higher, locking in a purchase sooner can feel safer than waiting for a “perfect” moment that may never arrive.
At the same time, housing values nationally have been close to flat over recent quarters, with small regional variations rather than sharp swings. That sense of stability is another reason first-home buyers increase market share: they see less risk of short-term price shocks and more chance to buy calmly.
Rents, Investors, And The Bigger Picture
Stats NZ data shows rents edging higher again after a soft patch, with only small annual rises and many regions already expensive relative to incomes.
For investors, higher interest costs and limited rent growth squeeze returns. Many landlords are cautious about adding more debt in this setting, especially with the possibility of future tax changes. That adds to the trend where first-home buyers increase market share while investors trim their activity.
For renters, the picture is mixed. In many areas there is still decent choice in rental markets, but rents already take a large share of income, which can slow deposit saving. This is where planning and advice matter, and knowing how lenders assess risk can give renters a clearer picture of what banks will look for before approving a home loan. Mortgage Managers advisers often work with clients a year or more before they buy, helping them:
Set a realistic purchase price range
Build a savings plan that works around rent
Clean up short-term debts to improve borrowing options
This kind of preparation is one reason first-home buyers increase market share even when the broader economy feels uncertain.
Why Now Can Be A Good Time To Buy Your First Home
A soft market does not guarantee a bargain, but it shifts the balance of power towards buyers. Advisers say conditions suit first-home buyers right now because:
More room to negotiate – With fewer bidders, you can negotiate on price, settlement dates, and conditions such as finance and building reports.
Less pressure at open homes – You can compare several properties without feeling rushed into quick offers.
Vendors more willing to listen – Owners who need to sell are often more realistic about price in a slow market.
Stable prices for planning – When prices are flat, it is easier to set a budget and stick to it.
Mortgage Managers is seeing a lift in approved first-home buyers who are ready to act but not desperate. Advisers report more first-home clients than they have seen for some time, and these buyers can wait for the right property rather than stretching their budget just to win against investors.
When first-home buyers increase market share in this way, it reflects confidence that with the right support, homeownership is still within reach — and that now is a good time for first-home buyers to be actively looking.
Practical Steps To Take Advantage Of The Window
If you are thinking about buying in the next 6–18 months, use this softer phase to get your finances and strategy in shape.
1. Build And Structure Your Deposit
Contribute regularly to KiwiSaver and check how much you could withdraw for a first home.
Check the First Home Loan from Kāinga Ora to see if you meet income and other criteria.
Pay down high-interest debts such as credit cards and personal loans to lift the amount banks may lend.
Tip from Mortgage Managers: “Treat your savings for the deposit like a non-negotiable bill you pay yourself each month, and aim to save the amount that your mortgage repayments would be (less existing rent) to show that you can afford the future mortgage.”
2. Understand What You Can Borrow
Banks look at your income, expenses, debts, and debt-to-income (DTI) ratio. A broker or adviser such as Mortgage Managers can:
Estimate your borrowing range
Explain how different lenders view your situation
Help you compare fixed and floating rate options
Knowing your limit upfront keeps your search focused and avoids disappointment.
3. Pre-approval means a lender has checked your finances and is willing to lend up to a set amount, subject to conditions — including a serviceability assessment that confirms you can meet repayments at a stress-tested rate.
Pre-approval means a lender has checked your finances and is willing to lend up to a set amount, subject to conditions. In a soft market, pre-approved first-home buyers increase market share because they can move quickly on good properties while still negotiating firmly on price.
4. Be Flexible On Location And Property Type
Many Kiwis enter the market by:
Buying smaller homes or units
Choosing fringe suburbs or regional centres
Considering new builds that may qualify for grants
Flexibility on your first purchase can be a stepping stone that builds equity for your next move.
What This Shift Means For Kiwi First-Home Buyers
When you hear that first-home buyers increase market share in a soft market, it signals that other buyer groups are stepping back and space is opening up for you.
Prices are stable, competition is thinner, and advisers like Mortgage Managers are seeing more first-home clients succeed with well-planned applications. As one Mortgage Managers adviser puts it:
“This is the first extended time in years we have seen first-home buyers able to take a breath, get organised, and still find plenty of options to buy at reasonable prices.”
If you are prepared, patient, and clear on your numbers this phase of the market can work in your favour. Homeownership may still feel challenging, but it is far from out of reach. For many New Zealanders, now is one of the more balanced times to turn saving and planning into a set of keys.
