Buying your first house Guide

Buying your first house is likely to be the biggest investment decision of your life. While the prospect of owning your own home can be exciting, it’s also hard to know where to begin. Let us help you get going:

The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.

There's a lot of information required when buying a first home, but luckily this information is available from a number of sources.  These sources include banks, insurance companies, real estate companies and financial advisors.

Regardless of whether you are buying a priced property, or a property being sold via auction or tender, it's important to know the following:

  • How much you can afford to borrow to buy your home
  • How large a home deposit you will need (see Question 1)
  • What other costs you will incur during the purchase of the property
  • How to go about making an offer on the property and some knowledge around the possible terms and conditions that can be included within the Sales and Purchase Agreement to give you adequate buying protection

Talk to a friendly First National Real Estate agent for further advice.

It's important to know exactly how much money you can borrow before looking for your first home. This will indicate the prices of the properties you can afford.

  • For your first New Zealand home, you will typically need around 20% of the purchase price as a deposit.
  • A bank or mortgage broker can help you establish a realistic figure that you will be able to borrow based on the amount you have already saved and your expected future income.
  • You can also use an online mortgage calculator to see how different loan lengths and interest rates affect repayment amounts. Most New Zealand banks offer this functionality on their websites.
  • Once you've decided that you're comfortable with borrowing a certain amount, and you've found a lending organisation willing to lend to you, it is sensible to get your loan “pre-approved”. This allows you to make an offer on a house with more certainty that you’ll be able to borrow the funds required.

Parents or other family members may be able to help you to secure a loan that would otherwise be out of your financial reach.  There are a variety of options available for parents who wish to help, which are listed below:

  • If your parents or other family members are willing, they may be able to use the equity in their own property to help you buy your first home sooner. In this instance, they would take out a mortgage on their own property (and pay necessary interest), to provide you with the cash to make up your deposit.
  • If you don’t have a large enough deposit to meet the lender’s criteria for a loan, but you do have the ability to service that loan, lenders may allow your immediate family members to use the equity in their own home as security for your mortgage. In this instance, your family members do not take out a loan themselves, but their property is used as security on the loan (and can be sold if you default).  This is more palatable to some parents / family members.
  • Another option is to take out a “Family Equity Loan”.  This arrangement makes yourself and your family member joint borrowers on the mortgage. Both are responsible for repayments.  The debt servicing calculations are based on the incomes and expenses of all borrowers.

With all of these options there are risks involved for your family member. If you can’t keep up with your mortgage repayments, your parents may be required to pay off the remainder of your loan or, even worse, sell off their own home to cover your debt.

If you’ve been in New Zealand's KiwiSaver superannuation scheme for at least three years, and are buying your first residential property (to live in), you may be eligible to withdraw money to put towards a home loan deposit. Where this is possible, you can withdraw your own contributions and your employer’s contributions, but not the $1000 New Zealand Government kick-start or any tax credits.

The KiwiSaver website provides further advice about this.

The three most common ways to sell residential property in New Zealand are via private treaty sale, auction, and tender.

Private Treaty Sale

This is the most common method for selling a house in New Zealand. A property will be advertised “For Sale”, with a fixed asking price or explicitly stated price range.

  • Interested parties make offers and negotiate with the seller through the seller’s real estate agent
  • The agent may be negotiating with several parties at once and acts under the instruction of the seller
  • When you commence a negotiation, it’s important to be serious and respond quickly, fairly and decisively


An auction involves prospective buyers bidding against each other at the same time, with the property being sold to the highest bidder.  Home auctions are becoming increasingly popular in New Zealand, especially in popular cities like Auckland where there is limited house supply and a large number of buyers in the market.

  • The property will be advertised for a set period of time during which potential buyers must complete all of their enquiries (legal, building and any other relevant inspections), arrange their finance & be ready to bid
  • On the day of the auction, buyers (or their agents) put in competing bids until the highest bid is reached and no one is willing to bid any higher
  • Prior to the auction commencing, the seller will have informed the auctioneer of their ‘Reserve Price’. This is the minimum price they are willing to accept.
  • If someone makes a bid that is at or above the reserve price, the auctioneer will declare that the property is 'on the market' and the property will be sold to the highest bidder
  • If the reserve price has not been reached, the seller has the option to lower the reserve price and start the bidding again. Otherwise, the person who put in the highest bid (below the reserve price) will be given the first option to purchase the property at the reserve price
  • It the highest bidder opts not to purchase at the reserve price, the property is considered back on the market and any other buyers may negotiate with the seller (or their real estate agent)
  • If the property has been sold, the successful bidder must sign the Sale and Purchase agreement and pay a deposit (typically 10%) straight away.


A property sale by tender is a hybrid selling method. It involves a set tender period during which the seller will accept offers.

  • Each buyer submits a confidential offer in writing to the real estate agent.
  • At the end of the tender period (“tender day”) the seller will make their decision.
  • There is no reserve price and the seller is free to accept or reject any offer they wish to.
  • Often a deposit will need to be submitted along with the offer. This is refundable if the offer is rejected.

When you're ready to make a formal offer to purchase a house in New Zealand, there are a number of steps that are typically followed.

  • Normally you will make your offer through a real estate agent using a standard Sale and Purchase Agreement.
  • The real estate agent will present your offer to the owner, using the Sales and Purchase Agreement. If the owner accepts your offer, they will sign the form and this document will become a legally binding sale contract.
  • The seller may want to negotiate first, in which case they could make a counter-offer, or simply reject your offer and ask you to improve it. During these negotiations, the real estate agent will provide some guidance (for both owner and buyer) on what they think is a more acceptable offer.
  • Once the owner accepts your offer you will both finalise the Sale and Purchase Agreement. This agreement is legally binding, but you are both allowed to add conditions to the agreement which provide a right to back out of the deal if not met. Common conditions include making the purchase contingent on securing finance, selling your previous home, receiving the results of a building inspection, or having the seller make repairs.
  • Once you’ve signed the Sale and Purchase agreement, you'll need to pay a deposit to the real estate agent (usually around 10% of the purchase price). The real estate agent holds these funds in a trust account.
  • When your house sale goes Unconditional - i.e. when all the conditions included in the Sale and Purchase Agreement are met - the agent will deduct their agency fees and then pay the balance to the seller.
  • House sales in New Zealand do not have a cooling off period allowing a change of mind. Once you’ve signed a Sale and Purchase Agreement, there is no backing out of the transaction unless any of your conditions are not met.

It is always wise to seek qualified legal and financial advice before signing any agreement, if you are unsure of your own ability to protect yourself from risk.

The New Zealand Government provides three different avenues for assistance when buying your first home.

KiwiSaver First Home Deposit Subsidy
If you've been contributing to KiwiSaver for at least 3 years, you may be eligible for a first home deposit subsidy. The subsidy is worth $1,000 for each full year you've been contributing to KiwiSaver, up to a maximum of $5,000 for five years. If you and your partner are both eligible, you can receive a subsidy of up to $10,000.

To qualify, you must have contributed at least the minimum amounts below:

  • 4% of your total income for the period 1 July 2007 to 31 March 2009 to a KiwiSaver scheme, or a complying superannuation scheme, for at least three years
  • 2% of your total income for the period 1 April 2009 to 31 March 2013 to a KiwiSaver scheme, or a complying superannuation scheme, for at least three years
  • 3% of your total income for the period 1 April 2013 onwards to a KiwiSaver scheme, or a complying superannuation scheme, for at least three years

You must also be buying your first home and be planning to live in the house yourself for at least six months. Guidelines will also apply based on your income and the price of the house you are purchasing. See the KiwiSaver website for more details.

Housing New Zealand First/Home Grant
This initiative provides grants (10% of the purchase price, up to $20,000) to purchasers of select properties that Housing New Zealand is selling.

To qualify you must:

  • Be purchasing your first home
  • Plan to live in the house for at least three years
  • Have a gross annual income before tax of $53,000 or less (for an individual) or a combined gross annual income before tax of $80,600 or less (for a couple)
  • Be pre-approved by a certified bank or lending institution (i.e. to show you can service the mortgage)

See the Housing New Zealand website for more details.

Housing New Zealand Welcome Home Loan
If you have a combined household income before tax for the last year of $80,000 or less (for an individual) or up to $120,000 combined (for two or more borrowers) you may be eligible for a Welcome Home Loan through select lenders. This means that you will only be required to provide a deposit of 10% (rather than the typical 20%) with Housing New Zealand underwriting the loan for the lender.

There are limits to the size of the loan depending on the region you are buying. See the Housing New Zealand website for more details.

Housing markets can move quickly and a property that is listed could be sold within weeks, days, or even hours.  You should put an offer on a property as soon as you wish to buy it, whether it's for sale by auction, private treaty or tender.

You should consult a qualified lawyer, solicitor or conveyancer before a Sale and Purchase Agreement (or any other contract) is signed.  Your opportunities to end the contract can be severely limited if you seek legal advice after signing.

Yes, you can.  The move in date, financial settlement period, and the deposit amount given to the agent can all be negotiated with the seller prior to signing the contract.

Whenever land is sub-divided and registered as a unit title development (i.e. apartments or units) then a legal entity known as a Body Corporate is created. The Body Corporate members are all of the individual owners of a unit or flat within the development or apartment block. Most Body Corporates establish a committee, who perform administration and tasks and represent the interests of all of the owners.

  • The Body Corporate is responsible for the management and maintenance of the units or flats, ensuring they are kept to a good and tidy standard
  • The Body Corporate will have (or produce) a set of rules that every owner will need to follow. These rules cover things like the use of shared access ways and how repairs or maintenance costs will be attributed to each owner.
  • The Body Corporate will typically charge an annual levy to cover basic ongoing expenses (e.g. rubbish collection, utilities for common areas, insurance etc.).  They may also levy one-off payments for extraordinary expenses (major repairs or renovations, or changes to rent if the premises are leasehold).

The first major hurdle on the path to home ownership is working out how big a deposit you’ll need and then saving for it.  New Zealand banking regulations specify maximum percentage amounts that lenders can advance to home buyers, to reduce the risk of financial hardships and defaults if property prices fall.  Any difference between the property purchase price and the advance will be the deposit needed.

Whilst these percentages move around at times, you should aim to have a 15% to 20% minimum deposit to buy your own home. When buying a home for the first time, follow the helpful advice below:

  • Calculate how much you can realistically afford to borrow, and how any debt servicing requirements / rates will allow you to live reasonably comfortably.
  • Consult a financial advisor, friend, or family member who has bought property before. Seek out as much advice as possible.
  • Don’t financially over-commit when buying your first home. A bank or lending institution may be willing to lend you a larger amount, but you should not necessarily take the offer. Know your budget and stick to it.
  • Ensure that you have financial reserves to cover things like legal costs, moving in (and out costs), unexpected repairs and maintenance etc.

Visit our First National Real Estate website, enter your budget and accommodation type sort (unit, flat, house etc.) and we’ll let you know where we have properties that are perfect for you. We have a wide range of residential properties available and coverage in all major New Zealand areas.

Housing markets change all the time, like interest rates.  Whilst house prices often increase in popular areas over time, this is not the case in all markets or areas.  First National Real Estate has many offices in New Zealand.  Our experienced real estate agents are happy to discuss your specific needs and circumstances with you, and provide guidance whether you are buying or selling a home.

First National Real Estate agents are trained to help guide first time home buyers through all the steps involved with purchasing a property. We aim to make the process as simple and hassle-free as possible for you.  Importantly, we're here to help. Call us or drop in for a chat and we'll give you advice to get you into your dream home.

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