Posted April 28th, 2025

Part 1 : Falling Interest Rates

The New Zealand housing market is in an interesting phase, creating unique opportunities for prospective homebuyers. Higher interest rates have limited what many can afford, creating less competition in the market. But with interest rates now falling that calm may not last long as both buyers and investors return to the market, potentially increasing competition and driving up prices.
So, why should you consider buying now, and how can shared ownership with YouOwn help you secure a home with a low deposit? Let’s dive into the reasons.

1. Interest Rates Are Easing.

For much of the past year, high interest rates made mortgages challenging to afford, forcing many would-be buyers and investors to hold back. But recently, there’s been a shift. In the last week, major banks in New Zealand have begun reducing their rates, with experts predicting that mortgage interest rates could drop further by mid-2025. This trend creates an opportunity for buyers to enter the market under favorable conditions before it heats up again.

Lower interest rates mean lower monthly payments, making it more affordable for first-time home buyers to purchase now rather than wait. Investors who have been sidelined by high interest rates are likely watching closely, and as rates continue to decline, they’ll probably jump back into the market to take advantage of lower borrowing costs. Acting before that happens allows you to avoid competing with a flood of investors when rates are more attractive.

2. Buyer-Friendly Market Conditions

We’re currently in what many would call a “buyer’s market.” Inventory is high, competition is low, and sellers may be more willing to negotiate. With anticipated rate cuts throughout 2025, now is a strategic time for potential homeowners to get ahead of the crowd. As more buyers re-enter the market and stock begins to clear, the current “fear of overpaying” could quickly shift to “fear of missing out.”
Purchasing now also gives you an edge in locking in prices before they trend upwards, which is likely to happen as the market heats up and investor activity resumes.

3. Lending Criteria May Loosen

As banks cut their interest rates and look to attract more buyers, lending criteria are also expected to ease. This change will make it easier for first-time buyers to get mortgage approval with potentially less stringent income and deposit requirements.
For those on the fence, this easing represents a unique window of opportunity. Entering the market while both rates and lending criteria are favorable can put you in a stronger position to secure a home and maximize your purchasing power.

4. Long-Term Growth Potential

While short-term economic fluctuations can feel daunting, New Zealand’s housing market remains robust over the long term, backed by steady population growth, ongoing demand, and a persistent housing shortage. Buying now positions you to benefit from future market growth, as prices are likely to recover and continue to rise.

As the market stabilizes and investor interest grows, property values could quickly follow suit. Investing in a home today means you’re more likely to capture appreciation in the future, especially once current supply-demand imbalances tighten up.

Why Shared Ownership with YouOwn is a Great Option

At YouOwn, we understand that saving a 20% deposit is a major hurdle, particularly with high living costs. With our shared ownership model, you can purchase a home with as little as a 5% deposit. Here’s how YouOwn’s shared ownership can benefit you:

• Low Deposit Advantage: With YouOwn’s low deposit option, you need only a 5% deposit to secure your first home, which is significantly more achievable than the 20% required by most traditional mortgages.

• Flexible Ownership Model: Our shared ownership structure gives you the chance to get into the market sooner and enjoy the stability of homeownership. Plus, you have the flexibility to increase your ownership in part or full after 5 years and as your financial situation allows.

• Future Growth Potential: Buying now means you can benefit from the potential appreciation of property values over time. By partnering with YouOwn, you’re positioned to take advantage of future market conditions without being priced out by rising costs.

Start Your Home Ownership Journey with YouOwn

If you’ve been thinking about buying a home but are held back by the high deposit requirement, YouOwn is here to help. Our shared ownership model, coupled with the current buyer-friendly market conditions, creates the perfect opportunity to step into homeownership without waiting any longer. With interest rates on the decline, competition likely on the horizon, and flexible deposit options, now is an ideal time to buy.

 

Want to learn more? Reach out to YouOwn today to learn how our 5% deposit shared ownership program can turn your homeownership dream into a reality.

Ready to apply? Simply fill in our application form here: