First‑home buyers are continuing to play a significant role in New Zealand’s housing market, and the Bay of Plenty is no exception – though local dynamics mean the story here looks slightly different.
The central business district revival is critical to Tauranga’s recovery, particularly in the housing market. Photo: Mary Anne Gill
New data from Cotality shows first‑home buyers made up 28.4 per cent of purchasers in the final quarter of 2025, as falling interest rates and subdued house prices opened a window of opportunity for those able to act.
Kelvin Davidson
Cotality chief property economist Kelvin Davidson says buyers at the entry end of the market have been quick to respond to improving affordability.
“Interest rates have been down, house prices have been down and first‑home buyers have been tapping into that,” he says.
While Tauranga’s share of first‑home buyers sits slightly below the national average, Davidson says that does not signal weaker demand. Instead, it reflects the Bay of Plenty’s distinct mix of wealth, migration and demographics.
“First‑home buyer numbers in Tauranga are always a little lower than in some other cities. Wealth plays a bigger role here than income alone, with capital coming in from other parts of the country.”
That flow of external equity – often tied to downsizers and retirees – can intensify competition at the lower end of the market, particularly as the Bay of Plenty has one of the country’s highest proportions of older homeowners.
For local employers, that dynamic has implications beyond housing statistics. Competition for entry‑level homes affects workforce stability, staff retention and the cost of living pressures faced by younger workers.
A new home
Davidson says first‑home buyers have been supported by a combination of factors, including KiwiSaver withdrawals, low‑deposit lending and a narrowing gap between rental and mortgage costs.
“In many cases, servicing a mortgage has become cheaper than paying rent, but that’s only one part of the equation. There’s still a strong desire to own, particularly where people see long‑term security.”
Nationally, the Reserve Bank’s series of Official Cash Rate cuts through 2025 helped restore borrowing confidence, supporting transaction volumes without triggering rapid price growth. With house values still below their post‑pandemic peak, buyers have been able to act without the pressure of runaway competition.
Looking ahead, Davidson expects conditions to tighten gradually. The Reserve Bank is widely expected to lift the OCR later this year, with mortgage rates and house prices likely to follow – though modestly.
“The outlook for 2026 is for rising house prices and sales, but not a return to the extremes we saw after the pandemic,” he says.
For Bay of Plenty businesses, the message is one of timing. The current window for first‑home buyers may not remain open indefinitely, particularly in a region where population growth, retirement migration and limited housing supply continue to shape the market.
“Home ownership has never been easy.
“Renting is a legitimate long‑term option for many, but ownership remains the goal for most New Zealanders and that aspiration is still driving behaviour.”
A new home
