More than half of New Zealand’s first-home buyers are getting on the property ladder without a full 20% deposit, according to Kelvin Davidson, chief economist at property insights firm Cotality, writing in OneRoof. Davidson said recent home loan figures show around 50-55% of loans to first-home buyers this year have been written at less than 20% equity, while loan-to-value ratio rules have not been a major restraint — in June, around 16% of lending overall went to owner-occupiers with less than a 20% deposit.
Davidson also noted that bank switching, or refinancing, remains high by past standards, with borrowers extending loan terms further: 50-60% of recent lending has been on a two-year fixed rate, up from less than 20% as recently as last November. Separately, the number of new dwellings consented continues to rise, reaching 40,581 in the year to June — the highest figure since August 2023 — driven by growth in Auckland, Canterbury and Otago.
Davidson said a September rate rise from the Reserve Bank of New Zealand still looks likely, even after the unemployment rate rose from 5.4% in the first quarter to 5.6% in the second, the highest in nearly 11 years, since the increase was driven by a larger labour force rather than falling employment.
References
OneRoof — Death of the 20% deposit? More than half of first-time buyers are overcoming the savings hurdle
