First-home buyers hit a record market share as sales and values tread water nationwide
New Zealand's housing market is stuck in a holding pattern, with property values and sales activity both trending sideways through the first half of 2026 — but first-home buyers are bucking the trend, accounting for a record share of deals nationwide.
First-home buyers gain ground as investors turn cautious
According to the Cotality LJ Hooker Market Overview for July, first-home buyers claimed more than 28% of market share in Q2, the highest level on record, with even stronger representation in softer markets like Auckland and Wellington.
Kelvin Davidson (pictured left) of Cotality NZ noted the market conditions have created an opening for this cohort even as broader activity cools.
"Certainly, first home buyers are still going from strength to strength, accounting for a rising number of deals and also a record high market share of more than 28% in Q2," Davidson said.
LJ Hooker head of research Mathew Tiller (pictured right) said the figures reflect resilient demand despite softer conditions overall.
"The market isn't moving at the pace it did a few years ago, but people still want to buy a home. First home buyers have remained active because they're purchasing for lifestyle reasons rather than trying to time the market," Tiller said.
The flip side of that story is a retreat by mortgaged multiple-property owners, including so-called "mum and dad" investors. This is already visible in the numbers: mortgaged investors pulled back 5.7% in the first five months of 2026, the only major buyer group to shrink, according to Cotality's June Monthly Housing Chart Pack.
Much of that hesitancy centres on Labour's proposed 28% capital gains tax on investment property, which would apply only to gains accrued after 1 July 2027 and only if Labour forms government following November's election. Beyond the tax debate, investors are also weighing weak rental yields and rising council rates, alongside the possibility of interest deductibility being phased out again.
Sales and values stuck in neutral
Listings remain elevated throughout, sitting roughly 35% above the 2019–23 average, keeping pricing power firmly with buyers.
"We're not seeing many vendors having to capitulate, but buyers nevertheless hold a lot of the pricing power in these conditions," Davidson said.
LJ Hooker head of network NZ Allaine Burkett said that extra supply is translating into real negotiating room for buyers on the ground.
"Depending on the property and the seller's circumstances, buyers may have more flexibility around price, settlement terms or contract conditions," Burkett said, adding that first-home buyers are also taking longer to commit — spending more time on suburb research, open homes and building inspections before making an offer.
National sales volumes fell around 5% year-on-year in Q2, extending a 3% decline in Q1, with Cotality now expecting full-year 2026 volumes to hold around 90,000 — well below earlier forecasts of up to 100,000. Property values have been similarly subdued, edging down 0.2% nationally in June and 0.8% over the past three months, with Auckland and Wellington both down 1.3% since March, while Christchurch posted a modest 0.4% gain.
A cautious path forward
There are early signs the rental downturn may be levelling off, with national rental growth hitting 0% year-on-year in the three months to May — the first time a fall has been avoided in 13 months. Still, Davidson cautioned against reading too much into the improvement, noting "a fresh boom in rents seems unlikely, but the recent downturn may at least be coming to an end."
Affordability remains the key constraint for brokers to manage with FHB clients.
"Interest rates are still much higher than they were a few years ago, and household budgets remain under pressure. Buyers should make sure they understand what higher repayments could look like in the future and buy within their means," Tiller said.
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