The short version: New Zealand house prices are roughly flat and about 28% below their 2021 peak after inflation [1][2]. The average KiwiSaver balance grew 11% last year [3]. For many couples, two balances are close to a 10% deposit, and some buyers can get in with 5% [6]. Rates are rising, so buy with a buffer.
New Zealand house prices are roughly flat and about 28% below their 2021 peak after inflation [1][2]. The average KiwiSaver balance grew 11% last year [3]. For many couples, two balances are close to a 10% deposit, and some buyers can get in with 5% [6]. Rates are rising, so buy with a buffer.
Are NZ house prices still falling?
No. They’re flat, which for a buyer is the next best thing. In August 2026 the national median sale price was $750,000, down 1.3% on a year earlier. Homes took a median 51 days to sell, and there were 32,908 listings on the market, up 9.7% [1].
After inflation, prices are back to mid-2019 levels, 28% below the 2021 peak [2]. That’s not “2017 prices” in dollars, but in buying power it’s a big reset. What it means for Aroha and Sam: more houses to choose from, more time to decide, and sellers who actually answer the phone.
How much KiwiSaver do first home buyers actually have?
More than most people assume. The average KiwiSaver balance rose 11% to $40,340 in the year to March 2026 [3], while house prices went slightly backwards [1]. (The periods don’t line up exactly, and balances grow partly from contributions, but the gap is real.)
ANZ says its average first-home withdrawal is about $43,000 per member [4]. Two of those is $86,000, more than 10% of the national median. Those are averages for people who’ve already withdrawn, and they’ve often been saving longer, so check your own balance. Aroha and Sam’s $88,000 is right in the zone.
Can I buy a first home with less than 20% deposit?
Yes, subject to assessment. Since 1 December 2025, banks can lend up to 25% of new owner-occupier lending to buyers with less than a 20% deposit [5]. There’s also the Kāinga Ora First Home Loan, which lets eligible buyers get in with a 5% deposit through participating lenders. Income and other criteria apply [6]. Low-deposit loans are rationed and usually cost a little more, but the door is open.
What would the mortgage cost me each week?
Aroha and Sam’s numbers. A $650,000 home, a $65,000 deposit, and a $585,000 loan. At an assumed 5.2% over 30 years, repayments come to about $741 a week. That’s more than the $620 national median rent [7]. Add a flatmate paying $250 a week and their net cost drops to around $491. Lenders treat boarder income differently, so that part is subject to assessment.
Leave room for rates to move. The Reserve Bank of New Zealand lifted the OCR to 2.75% on 2 September 2026 and said it may need to go higher [8]. As at 13 September, the lowest major-bank fixed rates were 4.95% for one year and 5.39% for two [9]. Every extra 0.5% on Aroha and Sam’s loan adds about $56 a week in interest.
What should first home buyers watch out for?
- Rates are heading up. Test your budget at 1 to 2% above today’s rate before you fall for a house.
- Tidy isn’t the same as sound. Get a building report, even on a place that looks freshly done up.
- Your job matters more than timing. Unemployment rose to 5.4% in the March 2026 quarter [10].
- Keep something back. Have an emergency fund left after settlement.
What’s the biggest mistake first home buyers make?
Here’s where Aroha and Sam’s story usually goes wrong. They find the house first. They love it. They make an offer, and then they find out a lender sees their numbers differently than they expected. Maybe the flatmate income is counted at half. Maybe Sam’s car loan cuts what they can borrow. Now the clock on the offer is ticking and every option costs more.
Talk to a broker before you start looking at houses. Most people think a broker just shops around for a rate. A good one does much more. I’ll help you understand your numbers and what happens to them if rates rise or your income changes, plan the timing of your KiwiSaver withdrawal, match you with lenders that suit your situation, and put together an application a lender feels confident about. In my experience, a well-prepared application carries real weight. The earlier we talk, the more options you have.
F.A.Q
Can I use my KiwiSaver for a first home deposit?
Eligible first home buyers can withdraw KiwiSaver savings toward their first home, subject to the scheme’s rules. A record $2.2 billion was withdrawn for first homes in the year to March 2026 [3].
How much deposit do I need for a first home in NZ?
Many banks will consider 10%, within the Reserve Bank’s limits on low-deposit lending [5]. Eligible buyers may get in with 5% through the Kāinga Ora First Home Loan [6]. A 20% deposit usually gets you better pricing and more lender choice.
Is now a good time for first home buyers to buy?
It depends on how secure your income is and how much buffer you have. Prices are flat and buyers have negotiating power [1], but rates are rising [8]. If you can comfortably afford the loan at a higher rate, conditions are better than they’ve been for years.
Aroha and Sam aren’t real clients. They’re composites of situations I see regularly, and their numbers are illustrative.This article is general information only and isn’t personalised financial advice. Lending is subject to lender criteria and assessment. Talk to a licensed financial adviser about your situation. Rates and figures are as at the dates stated.
Sources (accessed 23 to 28 September 2026)
1. REINZ, August 2026 data release, via Scoop (15 Sep 2026): https://business.scoop.co.nz/2026/09/15/national-prices-steady-amid-slower-activity-and-regional-variation/
2. BNZ, “Measuring the house slump” (25 Jun 2026): https://www.bnz.co.nz/about-us/news/measuring
3. interest.co.nz, FMA KiwiSaver Annual Report 2026: https://www.interest.co.nz/personal-finance/140187/fma-annual-report-shows-kiwisaver-members-took-out-68-billion-due-growing
4. NZ Adviser, KiwiSaver first-home withdrawals: https://www.mpamag.com/nz/specialty/residential/kiwisaver-hits-40k-average-balance-as-first-home-withdrawals-surge/589304
5. Reserve Bank of New Zealand, LVR timeline (updated 14 Aug 2026): https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-banks/standards-and-requirements-for-banks/macroprudential-policy/timeline-for-loan-to-value-ratio-restrictions
6. Kāinga Ora, First Home Loan (updated 9 Jul 2026): https://kaingaora.govt.nz/en_NZ/home-ownership/first-home-loan/
7. Trade Me Rental Price Index, June 2026, via Scoop: https://auckland.scoop.co.nz/2026/07/aotearoa-rental-market-hits-a-winter-flatline-as-national-rent-stalls/
8. Reserve Bank of New Zealand, OCR increased to 2.75% (2 Sep 2026): https://www.rbnz.govt.nz/news-and-events/news/2026/09/ocr-increased-by-25-basis-points-to-2-75
9. Opes Partners, current mortgage rates (13 Sep 2026): https://www.opespartners.co.nz/mortgage/interest-rates
10. Ministry of Housing and Urban Development, Housing Market Update, March Quarter 2026: https://www.hud.govt.nz/assets/Uploads/Documents/Housing-market-update/Housing-Market-Update-March-Quarter-2026.pdf
