Rate jitters and flat prices shape borrower behaviour
New Zealand’s housing market is firmly tilted towards buyers, with survey data from the latest NZHL Property Report by Tony Alexander (pictured) showing sentiment weakening across most indicators.
Worries about mortgage rates have surged, with the share of agents seeing rate‑anxious buyers jumping from 2% five months ago to 65%. Concerns about employment and the risk that prices may fall after purchase are also weighing on demand, while FOMO has virtually disappeared.
Price expectations remain subdued. A net 44% of agents feel values in their area are currently falling, signalling limited scope for near‑term capital gains. Fresh figures from Cotality NZ tell a similar story: national property values in April rose just 0.1%, leaving the median at $809,101 and still 16.8% below the January 2022 peak.
First‑home buyers remain key demand engine
Despite the softer backdrop, Alexander notes that “first-home buyers continue purchasing”. In the April survey, a net 26% of agents reported more first‑home buyers in their area, making this cohort one of the few bright spots since the turnover recovery began in early 2023. Many are using accumulated deposits, lower prices, and better credit availability to enter the market, even as higher mortgage rates cap how far they can stretch.
NZBA lending data back this up. In the six months to December, total new home lending rose 17.5%, with 70,811 new loans written and 24.4% going to first‑home buyers.
Investors retreat as buyer’s market deepens
By contrast, property investors are stepping back. A net 50% of agents say they are seeing fewer investors in the market, while a net 27% report more investors bringing stock to sell than three months ago. Higher holding costs, softer capital‑gain expectations, and tax uncertainty all appear to be biting.
Survey responses underline just how cautious this group has become: 58% of agents say “nothing is motivating investors to make a purchase”, with only a minority citing bargain‑hunting.
Alexander concludes, “We are solidly in a buyer’s market,” with a net 45% of agents judging vendors to be the more motivated party in negotiations.
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