Kiwi buyers lead five markets on smaller loans and lifestyle cuts
New Zealand homebuyers are more willing than buyers in any other market surveyed to scale back their borrowing and spending to get into a home, according to Cotality's Consumer Sentiment Report for Q2 2026.
The survey covered recent and prospective buyers in New Zealand, Australia, the United States, Canada, and the United Kingdom. It found 68% of New Zealand respondents had considered or would consider taking a smaller mortgage, the highest of any market, and 78% would trim lifestyle spending, among the highest surveyed. A further 59% were open to buying a smaller home, and 55% would pursue a no-cost or smaller refinance to reduce their debt.
Across all markets, the equivalent averages were 65% for a smaller mortgage and 69% for lifestyle cuts. Cotality said willingness to adapt was highest where affordability pressure was greatest, noting that buyers in Australasia faced more acute strain than those in the United States.
"Kiwi buyers are recalibrating rather than retreating," said Lisa Jennings (pictured left), chief commercial officer at Cotality, in a media release.
Rate expectations remain a hurdle
New Zealand buyers named 4.9% as the median mortgage rate that would bring them into the market, level with Australia and above the 4.5% average across all five countries.
Across the five markets, 30% of prospective buyers cited a target rate as their trigger to apply, compared with 20% of recent purchasers, who were more often pushed into the market by life events such as a new baby or a job move.
Borrowing costs are moving the other way. The Reserve Bank lifted the official cash rate to 2.75% on 2 September, its second consecutive increase, and its forecasts point to a further rise to 3% by December.
Jennings said the latest increase showed affordability pressures were unlikely to ease soon.
Cotality chief economist Selma Hepp (pictured right) warned that holding out carries its own costs.
"It's expensive to buy a home. But so is renting," Hepp said.
Up-front costs weigh on Kiwi buyers
The report found nearly one in three buyers in Australia and New Zealand are unsure whether they can cover the up-front costs of buying at all. Buyers in Australia and the UK told Cotality they had deliberately kept deposits smaller to hold on to cash reserves, accepting a larger loan in exchange for a financial buffer.
In New Zealand, many are also leaning on retirement savings. A record $2.2 billion was withdrawn from KiwiSaver for first-home purchases in the year to 31 March 2026, according to the Financial Markets Authority's 2026 KiwiSaver Annual Report.
Older buyers were the least willing to compromise, often because they are not borrowing in the same way. One Baby Boomer who recently bought in New Zealand said: "The house was mortgage-free from using the cash from (the) sale of my previous house."
For advisers, the findings point to borrowers who will stretch budgets well before they fall behind on repayments.
Hepp said distressed borrowers draw down credit and savings first, because "losing the roof over your head is the last thing to happen."
Read Cotality's full Bend it like buyers Consumer Sentiment Report.
Stay informed with the latest housing market trends and mortgage insights — subscribe to our free daily newsletter.
