Lower deposit loans and stronger KiwiSaver contributions could help more New Zealanders buy their first home, but mortgage affordability and housing supply remain the bigger challenges.
National and Labour are targeting two different barriers to home ownership. National’s proposal could help buyers overcome the deposit hurdle sooner, while Labour’s policy could help people build a larger deposit over time.
National has proposed widening access to the existing Kāinga Ora First Home Loan scheme by lifting its income cap to $300,000 for all applicants. The scheme allows eligible buyers to purchase with a deposit as low as 5%, rather than the 20% commonly required by lenders.
Labour has separately proposed making employer KiwiSaver contributions compulsory from 1 July 2028, including when an employee reduces or pauses their own contributions, and progressively lifting the minimum employer rate to 6% by 2032. It would set the default employee contribution rate at 4%, remove the minimum employee rate and extend employer contributions to people over 65 and parents receiving paid parental leave.
Cotality’s latest monthly data shows first-home buyers accounted for 29% of property purchases in July 2026, the highest monthly share since its Buyer Classification records began in 2005 and well above the long-term average of about 22%.
The result continues a series of records. First-home buyers represented 27.7% of purchases in the September quarter of 2025, before reaching 28.2% in the December quarter. Their share was 27.5% in the first quarter of 2026. Importantly, the increase has not been driven solely by a weaker overall market: first-home buyers purchased about 24,800 properties over the 12 months to March 2026, the highest annual total since the third quarter of 2021.
However, the national figure does not tell the full story, with first home buyer activity varying considerably between regions. In the first quarter of 2026, first-home buyers accounted for 37% of purchases across wider Wellington, 33% in Hamilton and 30% in Auckland. Every major centre was running above its own long-term average.
LJ Hooker Head of Research Mathew Tiller said the policies addressed two different barriers faced by prospective first-home buyers.
“These policies address different parts of the same challenge. National’s proposal could help buyers overcome the deposit hurdle sooner, while Labour’s policy could help people build their savings over time,” Tiller said.
“For households that can afford the mortgage but are struggling to save a larger deposit while paying rent and other living costs, access to a 5% deposit could bring home ownership within reach sooner.”
“A smaller deposit can help someone buy sooner, but it also means a larger mortgage and less protection if prices fall. Buyers still need to be confident they can manage the repayments and the other costs of owning a home.”
National’s proposal would raise the current income limits of $95,000 for a single buyer without dependants and $150,000 for multiple buyers or a single buyer with dependants. Tiller said expanding eligibility to households earning up to $300,000 could increase competition for affordable and lower-to-middle-priced homes.
“First home buyers now account for a record 29% of purchases, compared with a long term average of about 22%. They are no longer just one part of the market. They are now its most active buyer group,” he said.
“That share could rise further if deposit access improves while prices remain relatively stable. But the share does not tell the whole story. The real test is whether more people are buying homes they can afford to hold over the longer term.”
Tiller said expanded low-deposit access could provide another lift, but the market response would depend on where suitable properties were available.
“Wider access to low deposit loans could help more buyers enter the market sooner. The greatest impact is likely to be in areas where affordable homes are already in short supply,” he said.
“That could support sales activity and create more movement across the market as existing owners sell and make their next move.” “Buyer assistance works best when there are enough suitable homes available. Without more supply, some of the benefit could be absorbed by increased competition and higher prices.Tiller said Labour’s proposal could help future first home buyers build a larger deposit because eligible members can generally use most of their KiwiSaver savings, including employer contributions and investment earnings, to purchase their first home.
“KiwiSaver has become an important pathway into home ownership. More consistent employer contributions could help future buyers build a larger deposit and enter the market in a stronger financial position,” he said.
“The impact would take time because the changes would begin in 2028 and be phased in through to 2032. However, continuing to receive employer contributions could help people keep building their deposit even when household budgets are tight.”
Tiller said neither policy removed the need for careful financial preparation.
“The deposit is only one part of affordability. Buyers also need to be confident they can manage the mortgage and the ongoing costs of owning a home if their circumstances or interest rates change.”
“The best outcome would be more people buying suitable homes they can afford to hold over the longer term. These policies could help, but lasting improvements in home ownership will still depend on affordability, responsible lending and getting more homes built.”