Inflation is Easing

Inflation - the rate at which prices rise - is currently 3%, the top of the Reserve Bank’s target range. But there’s good news: it’s expected to fall to around 2% by mid-2026. This means everyday costs should rise more slowly over the next year.

Interest Rates are Dropping

The Reserve Bank has cut the Official Cash Rate (OCR) again, now sitting at 2.25%. Lower OCR means:

  • Cheaper borrowing: Mortgage rates are already falling and could drop further into 2026.
  • Lower repayments: If you’re planning to buy a home, your monthly costs could be smaller than last year.

Housing Market Outlook


Despite lower interest rates, house prices have stayed stable. Growth is expected to be moderate, not a big boom. What this means for you: less pressure to rush before prices spike, and more time to plan your purchase.

The Economy is Recovering

  • The economy slowed earlier this year but is starting to pick up.
  • Jobs: The labour market is stabilising, with more vacancies and hours worked.
  • Global factors: AI investment boosted global growth, but things may slow in 2026 as trade barriers and reduced export demand kick in.

What Does This Mean for First-Time Buyers?

  • Borrowing is looking more affordable: Lower mortgage rates make home loans more affordable.
  • Prices are stabilising: Inflation is easing, so everyday costs should feel less pressured.
  • Housing market is steady: No big price spikes expected, giving you time to plan.
  • Confidence is returning: The economy is recovering, which supports jobs and incomes.

Action Plan for First-Time Buyers

  1. Check your budget: Lower interest rates mean your borrowing power could improve.
  2. Get pre-approval: Lock in a good rate while they’re trending down.
  3. Plan for the long term: House prices are stable, so focus on finding the right property - not rushing.
  4. Stay informed: Keep an eye on rate changes and market trends.

Ready to start looking? 

Now is a great time to start planning your first home purchase. Lower interest rates and a stable housing market make conditions more favourable than they’ve been in a while.

If you're ready to start looking - we'd love to help guide you through the process.

Visit our Mortgage Adviser Page or more information. 

Read more stories

Mortgage-Advice

MTF | 8 Jul 2025

Why isn’t this bigger news?

For a prospective homebuyer, the number of houses to choose from in New Zealand is the highest it has been for about ten years (1), and interest rates the lowest they have been in more than three years (2). Whether you're a first-home buyer, looking to refix your existing mortgage, or expanding your property portfolio, there are fantastic opportunities available right now.
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By Narelle Jakeway, MTF Mortgage Adviser | 18 Nov 2024

What size deposit do you need to buy a house in NZ?

If your next big goal is buying your first home, saving up for your deposit can become something of an obsession. And a good one too, because property ownership is how most Kiwis improve their financial position over a lifetime. As with all goals, it helps to know what the finish line looks like, i.e. how much do you need to save to buy a suitable property? So in this article we’ll look at the question of house deposits from every angle.