New Zealand’s property market is showing clear signs of recovery, with expert forecasts predicting steady growth as falling interest rates and renewed confidence reshape the landscape.
After years of volatility, New Zealand’s property market is finally turning a corner. Industry experts are cautiously optimistic about 2025, with multiple indicators suggesting the market has moved from correction to stabilisation, setting the stage for measured growth ahead. Building inspectors are seeing signs of greater activity in the market.
The numbers tell a compelling story of recovery. New Zealand’s property market is approaching 2025 with a mix of challenges and opportunities, as lower mortgage rates contend with stretched affordability, abundant listings, and a softening labour market, according to CoreLogic NZ’s latest Housing Chart Pack.
Property sales activity has been particularly encouraging. According to the latest data from the RBNZ, 21,108 residential property sales were registered nationwide in the first quarter of 2025. This represents a 3.01% increase compared to the same period in 2024 and marks the eighth consecutive quarter of positive growth since Q1 2023.
CoreLogic NZ Chief Property Economist Kelvin Davidson observes that “Clearly confidence levels are growing, no doubt reflecting the falls in mortgage rates”. However, experts caution that “The market isn’t booming, but clearly a bit more confidence is returning”.
The banking sector’s predictions for 2025 are remarkably consistent. The median forecaster expects house prices to increase by 2.85% in the year to December 2025, while major banks offer more optimistic outlooks. On average, the median forecast from our largest banks predicts that house prices will rise by 6.80% between December 2024 and December 2025.
Some industry leaders are even more bullish. The New Zealand real estate market is set to rebound in 2025, with leading property group Raine & Horne forecasting 5-7% growth. Angus Raine, Executive Chairman of Raine & Horne, explains that “The Reserve Bank’s series of rate cuts—starting with a 25-basis point reduction in August, followed by a 50-point cut in October and another 25 points in November—are now filtering through to the market, prompting buyers and vendors to take action”.
The Reserve Bank’s monetary policy is having a tangible effect on market dynamics. “We’re witnessing increased sales, shorter days on market, and higher attendance at open homes. While these are still early signs, market activity has noticeably picked up momentum since the initial rate cut in August, which bodes well for growth in 2025”, notes Raine.
This improved activity is particularly evident in listing behaviour. Nearly 9,000 new listings came onto the market during January, a significant increase from December’s record-low new listing figures. Up 21.2% year-on-year, the data suggests sellers dove headfirst into 2025.
While national trends provide the broad picture, regional differences remain significant. Four regions – Auckland, Hawke’s Bay, Nelson & Bays, and Southland – saw prices grow both month-on-month and year-on-year, while Coromandel, Waikato, Wairarapa, and Wellington recorded declines over the same periods.
Auckland, New Zealand’s largest market, presents particular opportunities. 11,465 properties were available for sale in Auckland last month—the highest January level since 2012. Industry experts suggest this creates “a window of opportunity for those looking for property in the region”.
Regional centres are also showing promise. Areas such as Hamilton, Tauranga, and Dunedin are benefiting from infrastructure investments and new developments, driving increased buyer activity. James Clarke, of James Clarke Property NZ, observes that “Regional New Zealand is becoming a key story in 2025”.
Despite the positive momentum, affordability remains a central challenge. Lower mortgage rates will support sales activity and help stabilise property values, but affordability constraints, elevated listings, and a soft labour market will remain key challenges, warns CoreLogic’s Davidson.
The rental market reflects these broader pressures. In Q1 2025, the actual rentals for the housing component of the consumer price index (CPI) rose 3.7% year on year, compared with a 2.5% annual increase in the all-items CPI. However, “Turning to rents, the pace of growth remains subdued, with net migration having fallen a long way from its peak, and the stock of available rental listings on the market still elevated”.
The market conditions are creating specific opportunities for first-home buyers. With reduced borrowing costs, many are entering the market after years of waiting. This is particularly visible in urban centres such as Auckland, Wellington, and Christchurch, where new supply is slowly improving affordability.
Industry professionals emphasise the positive shift. “The return of first-home buyers is a healthy sign for the entire property sector. It reflects both affordability improvements and growing optimism”, notes James Clarke.
For those considering entry to the market, the current conditions offer advantages. Many buyers are choosing to sit on the sidelines, waiting for interest rates to drop or to see whether the market will dip even more. With more sellers and fewer buyers in the market, you might have more negotiating power, less pressure, and potentially better deals.
While investor activity has been subdued, signs of recovery are emerging. Even though rental yields have trended higher, they’re still relatively low compared to mortgage rates, so some would-be property investors might still be watching and waiting for interest rates to fall even further, according to Davidson.
However, gross rental yields are at their highest level since early 2016, reaching 3.9% in November, from a floor of 2.8% in late 2021, suggesting improving fundamentals for property investment.
The consensus among experts points to steady, sustainable growth rather than dramatic price movements. Taking these headwinds and opportunities into account, Mr Davidson expects property sales volumes to rise by approximately 10 to 15% in 2025, with national values increasing around 5%, marking a muted recovery by historical standards.
CBRE’s research supports this measured outlook. According to the latest CBRE survey of property valuation professionals, conducted in mid-June 2025, all respondents anticipate demand will either remain stable or increase over the next 12 months, with falling interest rates cited as a key driver of the market recovery.
The broader economic context remains supportive. Economic indicators for New Zealand in 2025 suggest that more accommodative interest rates are setting up the framework for a rebound in economic activity. Consumers will drive the initial rebound, according to CBRE’s market outlook. Some Auckland locations, such as East Auckland, West Auckland and Franklin, have seen increased activity.
For New Zealanders considering property decisions in 2025, the market presents a more balanced and sustainable environment than seen in recent years. While affordability challenges persist, the combination of falling interest rates, stabilising prices, and renewed market confidence creates genuine opportunities for both buyers and sellers.
The key to navigating this market successfully lies in understanding these evolving dynamics and making informed decisions based on current conditions rather than past market behaviours. As the Reserve Bank of New Zealand continues to support economic recovery through monetary policy, the property market appears well-positioned for steady growth throughout 2025.
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