The real cost of buying a house in New Zealand

These are the things that aspiring home buyers must consider

The real cost of buying a house in New Zealand

New Zealand’s housing market continues to boom, with house prices and home sales hitting record highs, despite newly imposed restraints aimed at slowing down the market and boosting supply.

Recent figures from the Real Estate Institute of New Zealand (REINZ) showed that 9,721 properties were sold in March 2021, a 31.2% rise from the 7,408 sold in the same period the prior year. The number was also the highest recorded sales in a March month in 14 years.

Twelve of 16 regions saw year-on-year growth in sales volumes, with the West Coast posting the largest increase at an outstanding 120%. Several regions also registered double-digit annual gains, including Auckland at 49.9% and Waikato at 42.4%

At the same time, median house prices hit a new record of $826,300, rising from $665,000 a year ago. Twelve regions also reached record median prices, with Gisborne leading the pack at $630,000 – a 56.9% year-on-year rise.

The West Coast, Hawkes Bay, Manawatu/Wanganui, and Otago also posted annual increases of more than 30%. The median house price in Auckland, meanwhile, rose 18.5% to $1.12 million – a new city record.

These record numbers follow the first tranche of loan-to-value ratio (LVR) restrictions, which was reinstated on March 01, requiring a 30% deposit for investors and 20% for owner-occupiers.

Earlier this month, the government also announced the removal of tax deductibility of interest on loans for residential property investment and extended the bright-line test to 10 years.

Here’s a breakdown of last month’s median house prices per region, according to REINZ’s March 2021 data.


Median house price

Year-on-year increase










Bay of Plenty






Hawke’s Bay





















West Coast












NZ excl. Auckland



New Zealand



Source: REINZ (*) Record high

Hidden costs of buying a home

Buying a property, however, is not a straight-forward process and there are several other costs that home buyers must consider apart from house prices. Here’s a list of expenses that buyers need to factor into when purchasing a home, according to consumer website MoneyHub.



Conveyancing and legal fees

$1,000 to $3,500

Mortgage arrangement fee

About $500

Property valuation

$500 to $1,000, depending on house size and location, and urgency

Building inspection (covers moisture, leak, electrical, plumbing checks, overall property inspection, cross-checking of council records, and repair estimates)

$500 to $2,000, depending on house size and location, and additional tests


$200 to $1,000, depending on the number of belongings and distance of the move


A few hundred to several thousand dollars, depending on the type of repair

New furniture and appliances

A few hundred to several thousand dollars

Source: MoneyHub

What benefits are available for first home buyers?

First-time home buyers in New Zealand can take advantage of several government incentives to significantly cut the amount of funds they need to buy a property. However, buyers must also meet strict eligibility requirements to access these grants. Here’s an overview of the various government-sponsored benefits available for first home buyers.

First Home Grants (Home Start Grants)

First-time home buyers, or previous homeowners who have been making regular contributions to KiwiSaver for the past three to five years, may be eligible for a First Home Grant of up to $10,000. Home buyers can apply for the grant through Kāinga Ora - Homes and Communities.

To be eligible for a First Home Grant, the applicant must:

  • Be at least 18 years old
  • Have earned $95,000 or less before tax in the past 12 months for a single buyer
  • Have earned $150,000 or less before tax in the past 12 months for two or more buyers
  • Not currently own any property, excluding Māori land
  • Have been contributing at least the minimum amount to KiwiSaver, or complying fund or exempt employer scheme, for at least three years
  • Purchase a property that is within the regional house price caps
  • Agree to live in the property for at least six months
  • Provide evidence of at least a 5% deposit of the purchase price of the property

First Home Loans

With a First Home Loan, buyers only need a 5% deposit instead of the standard 20%. First Home Loans are issued by selected banks and other lenders, and underwritten by Kāinga Ora, allowing lenders to provide loans that would otherwise sit outside their lending standards. Below are the eligibility requirements:

  • Income cap: Maximum yearly income of up to $95,000 (before tax) for a single person, or a combined maximum yearly income of $150,000 (before tax) for two or more people.
  • Minimum deposit: Minimum 5% of the purchase price of the house.
  • House price cap: The price of the house must be less than the regional house price cap.

House price caps


Existing/older properties

New properties




Queenstown-Lakes District



Kāpiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City



Hamilton City, Tauranga City, Western Bay of Plenty District, Waipa District, Hastings District, Tasman District, Napier City, Nelson City



Waimakariri District, Christchurch City, Selwyn District



Waikato District, Dunedin City



Rest of New Zealand




Kāinga Whenua Loans

The Kāinga Whenua Loan Scheme is an initiative between Kāinga Ora and Kiwibank to help Māori achieve home ownership on their multiple-owned land. The loans are available for both Māori land trusts and individuals with a right to occupy their multiple-owned Māori land. The requirements and application process vary, depending on the loan option.

Kiwibank approves and provides the loan, and applicants need to meet their standard lending criteria and the Kāinga Whenua criteria. Kāinga Ora provides lenders’ mortgage insurance for the loan.

A Kāinga Whenua loan limits the house an applicant can build, purchase, or relocate to the land to at least 70sqm, on piles, and with reasonable road access. It must also be located on the mainland North or South islands.

Tenant Home Ownership grant

The Tenant Home Ownership grant is a government-sponsored grant of 10% of the purchase price of selected Kāinga Ora houses up to a maximum of $20,000. The grant, however, is not available in areas where there is high demand for state houses, including Auckland, Wellington City, Christchurch, Hamilton, and Tauranga.


KiwiBuild is a New Zealand government programme that started in 2018 aimed at building 100,000 affordable homes for eligible first home buyers by 2028. To be eligible to buy a home, an applicant must:

  • Be at least 18 years old
  • Be a New Zealand citizen, permanent resident or a resident visa holder who is “ordinarily resident in New Zealand”
  • Not currently own a home in New Zealand or overseas
  • Have a pre-tax income from the previous 12 months of $120,000 or less for a single buyer or $180,000 or less combined for two (or more) buyers
  • Must commit to live in the KiwiBuild home for a minimum one year for a studio or one bedroom home and three years for a home with two bedrooms or larger, before the home can be rented out or sold

KiwiBuild homes range from studio apartments to multi-bedroom townhouses and are sold at different stages of development.  The price of a KiwiBuild home depends on its size and location. Price caps are used to determine the maximum price that a KiwiBuild home can be sold for. The current KiwiBuild price caps are:


Price cap

Auckland & Queenstown Lakes, studio or one-bedroom


Auckland & Queenstown Lakes, two-bedrooms


Auckland & Queenstown Lakes, three-bedrooms


Wellington, three-bedrooms


Rest of New Zealand