After a prolonged period of uncertainty, the New Zealand property market is showing encouraging signs of stabilisation and gradual recovery in early 2025, with lower interest rates beginning to improve buyer confidence across the country.
The New Zealand property market is currently in a transition phase, moving from a period of correction toward more stable ground. Recent data from CoreLogic shows national property values increasing by 0.5% in March 2025, reaching $812,195—the highest level since June 2024. This modest growth follows a 0.4% increase in February, representing the strongest consecutive monthly gains since early 2024.
Despite these positive indicators, the market remains well-balanced rather than booming. The national average asking price of $851,090 (according to realestate.co.nz) reflects a 4.7% decrease year-on-year but has shown signs of stabilisation with a slight 0.8% increase from February. This pattern suggests a market that’s finding its footing rather than racing toward another boom cycle.
The recovery isn’t uniform across New Zealand, with regions showing distinct patterns of performance. Auckland is leading the main centres with a 0.6% rise in property values, with North Shore particularly strong at 0.9% growth. Christchurch and Hamilton are also performing well, posting increases of 0.8% and 0.9% respectively.
Wellington has seen more modest growth at 0.3%, while Dunedin and Tauranga have lagged behind with slight declines or flat performance. These regional variations highlight the localised nature of real estate markets across the country, with some areas bouncing back more quickly than others.
In provincial markets, Whanganui has shown particularly strong growth at 0.8%, while Gisborne leads new listings growth at an impressive 23.8% year-on-year, suggesting renewed seller confidence in previously subdued areas.
One of the most significant factors currently affecting the market is the high level of available properties. With 36,870 listings nationwide in March 2025—a decade-high level and up 10.9% from March 2024—buyers have considerably more choice than they’ve had in recent years. This abundance of stock is creating a buyer’s market in many regions.
New listings rose 5.0% year-on-year nationally, reaching 12,029, with 13 of 19 regions recording increases. This suggests growing seller confidence, though the large inventory means properties are taking longer to sell compared to the heated market of 2021-2022.
Interestingly, data indicates that properties sold slightly faster in March than in February, suggesting a gradual pickup in transaction velocity. As recovery continues, this trend may accelerate, particularly with lower interest rates encouraging more buyers to enter the market.
The Reserve Bank’s reduction of the Official Cash Rate (OCR) to 3.75% (with another cut to 3.5% expected in April) has been a crucial factor in the market’s gradual improvement. Most banks are now offering two-year fixed mortgage rates around 4.99%, with further reductions expected for one-year rates in the coming months.
Lower interest rates are particularly significant given that many fixed-term mortgages are due for renewal in the first half of 2025. This timing may create a window of opportunity for both first-home buyers and those looking to upgrade, as affordability improves and borrowing capacity increases.
For first-home buyers, the combination of stabilised prices and lower interest rates represents the most favourable conditions seen in several years. However, affordability challenges remain, particularly in high-demand areas like Auckland, where prices remain well above pre-pandemic levels despite recent corrections.
The market appears to be establishing a “new normal” characterised by greater balance between buyers and sellers. Rather than experiencing the rapid growth seen in 2020-2021 or the sharp corrections of 2022-2023, we’re entering a period of more sustainable market conditions.
CoreLogic forecasts a modest 5% rise in national values over 2025, moderated by debt-to-income caps and ongoing economic challenges. This measured growth would represent a healthy recovery rate that avoids the risks associated with rapid price escalation.
The influence of global factors, particularly potential recession risks from the United States, cannot be discounted. New Zealand’s economy, while somewhat insulated by its focus on food and commodity exports, remains vulnerable to international economic trends. These external factors may limit the pace of recovery in the housing market.
Looking ahead, the property market is likely to continue its gradual recovery through 2025, with more meaningful price growth potentially emerging in 2026-2027. For buyers, the current market offers choice and negotiating power, while sellers benefit from improving conditions compared to the challenging environment of 2023-2024.
The resilience of first-home buyers has been particularly notable, with many taking advantage of the more balanced market conditions despite higher interest rates than pre-pandemic levels. Their continued participation, coupled with the gradual return of investors following regulatory changes, suggests a market that’s finding its equilibrium after a period of significant disruption.
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