KiwiSaver, a housing surplus, and fewer investors underpin a lasting turnaround
First-home buyers now account for a record 29.5% of purchases in the September 2026 quarter, and the shift is likely to last, according to Squirrel’s David Cunningham (pictured).
Writing on LinkedIn, Cunningham said KiwiSaver withdrawals now put around $75,000 towards the average first home. In his view, this and other structural shifts, not just a run of favourable conditions, are driving a long-awaited rebound in homeownership.
After falling from about 74% in 1991 to 64.5% in 2018, homeownership rose to 66% in 2023, the first increase in three decades. Cunningham estimates it now sits around 67%.
“But the tide has turned,” he wrote.
New entrants claim record ground
The latest share, reported in the Cotality-Westpac NZ First Home Buyer Report for October 2026, is well above the long-run average of 21 to 22%.
More than half of these buyers are now purchasing with deposits under 20%. They have been helped by the Reserve Bank of New Zealand (RBNZ) raising the low-deposit speed limit for owner-occupiers from 20% to 25% of new lending in December 2025.
Affordability has also improved. Prices remain more than 18% below their peak, and minimum monthly repayments on a median first home are about $558 lower than at 2023 rates.
Structural forces at work
Cunningham pointed to KiwiSaver as a key driver. Around 50,000 buyers withdrew about $2.2 billion last year, and an average of 1.7 accounts sits behind each purchase.
“That’s a massive deposit engine previous generations never had access to,” he said.
Squirrel’s analysis of Stats NZ data suggests the country has moved from a shortfall of about 55,000 homes in 2019 to a modest surplus of 15,000 to 20,000. Property investors have also pulled back under debt-to-income limits, higher interest rates, and tax changes, which means less competition for those stepping onto the ladder.
That backdrop should hold into 2027, with economists’ house price forecasts ranging from a 1% fall (ANZ) to growth of 2 to 4% (Kiwibank).
Risks to watch
“By Squirrel’s estimates, higher interest rates are the most likely spoiler,” Cunningham wrote. Bank economists still expect a December official cash rate (OCR) hike. Westpac forecasts a rise from 2.75% to 3% on 9 December, while ASB tips a peak of 3.5% by March 2027.
Cunningham also flagged job security as the main concern for recent low-deposit buyers. That risk is already visible, with the unemployment rate rising to 5.7% in the September quarter, its highest level since 2015. And he warned that the housing surplus could become a shortage again from 2028 if building slows.
For now, his advice to buyers is to use the breathing room the market offers to do their homework, speak with a mortgage adviser and avoid rushing into a decision.
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