Property values have been drifting lower, sales activity remains subdued, investors are being more cautious, and with an election ahead, there’s plenty of uncertainty about what could change next.
But underneath all of that, something interesting is happening.
The type of buyer getting a mortgage is changing.
The latest Reserve Bank of New Zealand lending data shows that new residential mortgage lending fell to $7.85 billion in July 2026, down from $8.45 billion in June and around 13% lower than the same month last year. (Reserve Bank of New Zealand)
But the more interesting story isn’t just how much people are borrowing.
It’s who is borrowing.
The buyer mix is changing
In July, new mortgage lending was split roughly as follows:
🏠 Other owner-occupiers — 59.6%
People who already own a home and are buying, moving or restructuring their property position remain the largest group by a significant margin.
🔑 First-home buyers — 20.1%
First-home buyers increased their share of new mortgage lending from 19.0% in June to 20.1% in July.
🏢 Investors — 18.9%
Investor lending fell from 19.5% of new lending in June to 18.9% in July.
So while the overall lending market has softened, the mix within it is shifting. And that tells us something important about the current property market.
First-home buyers aren’t waiting for everything to be perfect
One of the more consistent trends we’ve seen this year is the resilience of first-home buyers.
Cotality’s data shows first-home buyers have maintained a strong share of property purchases, helped by lower property values, improved affordability, access to KiwiSaver and the ability for some buyers to use low-deposit lending options. (Cotality)
That doesn’t mean buying is suddenly easy.
Mortgage repayments still need to stack up, deposits still matter and bank lending criteria haven’t disappeared.
But the conditions are different from a few years ago.
For buyers who are financially ready, a quieter market can create opportunities that simply weren’t available when properties were selling rapidly and competition was intense.
There may be more choice.
There may be more time to do your due diligence.
And in some situations, there may be more room to negotiate.
You don’t necessarily need the market to be booming to make a good property decision.
You need the numbers to work for you.
Investors are taking a more cautious approach
The investor story is different.
Investor lending accounted for 18.9% of new mortgage lending in July, down from 19.5% the month before. (Reserve Bank of New Zealand)
There are several reasons investors are being more cautious.
Rental growth has been relatively subdued, while ownership costs such as rates, insurance and maintenance remain important considerations. Cotality also notes that uncertainty around the upcoming election and potential changes to property tax settings is influencing some investor decision-making. (Cotality)
That doesn’t mean investors have disappeared.
It means they’re looking more closely at the numbers.
For an investor, a property that looks attractive on paper needs to stack up against the reality of:
- mortgage repayments
- rental income
- rates and insurance
- maintenance and property management
- tax considerations
- vacancy periods
- future interest rates
- and the amount of cashflow the investor is prepared to contribute
The days of simply assuming that property values will rise and rent will cover the mortgage are not enough.
Cashflow and the overall strategy matter.
What does the election have to do with it?
This is where things get interesting.
We’re hearing more questions from clients about how the election could affect their applications, property or properties and lending (particularly from investors).
Potential changes to property tax settings are one area being watched closely, but the reality is that we don’t know exactly what policy changes will be made until they’re proposed, confirmed and implemented.
That’s why we don’t think trying to predict the election is the smartest way to make a property decision.
Instead, ask:
What would happen to my numbers if things changed?
What if interest rates were higher than expected?
What if rent didn’t increase?
What if your costs went up?
What if tax settings changed?
What if your property value stayed flat for several years?
If the numbers still work, you’re making a decision based on your position rather than relying on the market to deliver a particular outcome.
What does this mean if you’re buying?
If you’re a first-home buyer, don’t assume you need to wait for the “perfect” time.
The better question is:
Can I afford the property I want, with a comfortable enough buffer, based on today’s numbers?
If the answer is yes, a slower market may actually work in your favour.
You may have more choice, more negotiating power and less pressure to make a decision simply because you’re not worried someone else will buy the property first.
But getting your finances sorted and pre-approval in place before you start looking is still important.
Knowing your deposit, borrowing capacity, likely repayments and lender options puts you in a much stronger position when the right property comes along.
What does this mean if you’re already a homeowner?
You don’t have to be buying or selling for the changing market to matter.
Your property value, mortgage rate, fixed-term expiry, equity position and overall lending structure can all affect your options.
And if you’re an investor?
This is probably a market for being selective rather than reactive.
Before buying another property, look at the entire picture – not just the purchase price.
The right investment isn’t necessarily the one with the highest potential capital gain.
It’s the one that fits your overall financial strategy and that you can comfortably hold through different market conditions.
The biggest takeaway
The latest lending data doesn’t tell us exactly where the property market is heading.
What it does tell us is that different types of buyers are responding differently to the current environment.
- First-home buyers are continuing to make their move.
- Investors are being more cautious.
- Existing homeowners remain the biggest part of the lending market.
- And everyone is having to make decisions in an environment where rates, property values and government policy are still moving.
So rather than trying to predict what happens next, focus on what you can control.
Know your numbers.
Understand your buffer.
Know what changes in rates, costs or policy could mean for you.
And then make the best decision for your current position — rather than trying to time an outcome that hasn’t happened yet.
Not sure what the current market means for you?
Whether you’re thinking about buying your first home, considering an investment, coming up for a refix or simply wondering whether your current lending still makes sense, we’re happy to run the numbers with you.
You don’t need to know exactly what you want to do before you reach out.
We’ll help you understand your options, what you can afford and what makes sense for your situation.
