First-home buyers hit record share as borrowers face higher refixing rates
Cotality data shows NZ values down 1.3% and sales down 14%, as first-home buyers hit a record 29.5% share and refixing borrowers face higher rates
New Zealand borrowers coming off fixed-rate mortgages are now refixing at higher rates, adding a fresh headwind to a housing market that has barely moved in months, according to Cotality’s October 2026 Monthly Housing Chart Pack.
Reserve Bank figures show one-year and two-year special fixed rates averaged 4.97% and 5.27% in September, both above the 4.80% average on existing fixed loans. A borrower rolling over now would typically pay about 0.17 percentage points more on a one-year term, or 0.47 points more on a two-year term.
Values drift as sales slide
National property values fell 1.3% in the year to September and are more than 18% below their peak, with prices edging lower for several months in a row. September recorded 6,519 sales, about 14% fewer than a year earlier and the ninth straight annual decline.
Listings remain high, giving buyers plenty of bargaining power, but most vendors are not under pressure to sell, which is limiting how far prices fall.
Cotality values the residential market at $1.66 trillion, carrying $404 billion of mortgage debt, but chief property economist Kelvin Davidson (pictured) cautioned against reading too much into its size.
“But scale shouldn’t be confused with momentum,” Davidson said.
Regional conditions vary widely. Auckland values fell 3.2% over the year and Wellington’s 3.1%, while Christchurch rose 3.4% and Dunedin 2.1%.
“There’s no single story across New Zealand at present,” Davidson said.
First-home buyers lead the market
First-home buyers made up a record 29.5% of purchases in the September quarter, extending their run of record market share from 28.3% in the June quarter. Many are using KiwiSaver for part of their deposit and drawing on banks’ low-deposit lending allowances.
“Current conditions remain among the most favourable for FHBs that we’ve seen for some time,” Davidson wrote in commentary published by NZFSG.
Movers, meanwhile, remain cautious about trading up or down.
What advisers should watch
Around 54% of existing mortgages by value are due to reprice within 12 months, although Cotality notes some of those borrowers may still refix lower in the short term.
The official cash rate (OCR) has been 2.75% since 2 September, with the next decision due on 28 October. Many new borrowers are choosing two-year fixed rates as banks and borrowers weigh further rises, and some may break existing loans early to secure a rate before rates climb again.
Mortgaged property investors made up 22.9% of purchases, below their long-run average of 24% to 25%, as rate increases squeeze their cash flow. Labour’s commitment to keep 100% interest deductibility and ACT’s proposal to remove tax ring-fencing on property losses may be rekindling some investor interest, according to Cotality.
Cotality expects no significant upturn until the labour market strengthens, which may not happen until well into 2027.
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