Forecasting home fronts
Nerida Conisbee Ray White Group Chief Economist
Sharon Zollner ANZ Bank Chief Economist
As New Zealand ’ s property market continues to navigate the changing tides of a global economy , experts are closely examining how international and domestic factors shape the outlook for the year ahead .
In predicting property performance in 2025 , Ray White Group chief economist Nerida Conisbee , and ANZ Bank chief economist Sharon Zollner share their views on what ’ s in store for mortgage holders , homeowners , buyers and sellers in 2025 .
Conisbee says the new year in New Zealand is poised to bring gradual improvement in the property market ' s performance , with economic indicators signalling that things are heading in the right direction despite some lingering uncertainty .
“ Central to this outlook are the Reserve Bank of New Zealand ’ s ( RBNZ ) recent policy decisions , including the reduction of the Official Cash Rate ( OCR ). The sharp 50 basis point reduction in October , followed by the anticipation of further reductions , is expected to bolster the housing market by reducing mortgage rates and enhancing purchasing power for buyers .
“ The Governor ’ s ( of the RBNZ , Adrian Orr ) recent comments that the OCR is headed to 3.5 per cent of thereabouts in the coming calendar year are positive news for borrowers ,” says Conisbee . “ As mortgage lending rates decrease , buyers have greater purchasing power . While this is a relief for borrowers , it signals
that the economy isn ’ t exactly on a strong footing , necessitating these sharp cuts to stimulate growth .”
However , Conisbee warns that the global economic landscape presents a risk to otherwise positive indicators . “ President Trump ’ s re-election in the United States and his stance on trade tariffs , particularly where $ 8.8 billion worth of New Zealand ’ s exports land , including wine , fish and beef , could face higher barriers . These tariffs could spark inflationary pressures , which in turn would likely lead to higher interest rates globally .
“ The ripple effects of this uncertainty could put upward pressure on borrowing costs in New Zealand , despite the RBNZ ’ s efforts to reduce the OCR .” Yet , Conisbee remains cautiously optimistic , highlighting the safety net provided by the RBNZ ’ s current lending restrictions , such as Debt-to-Income ( DTI ) ratios , which prevent a resurgence of the speculative buying that characterised the market in the pandemic years .
“ The lending restrictions are a sensible safeguard that will keep the market balanced ,” Conisbee says . “ No one wants a repeat of the red-hot conditions we saw during COVID-19 , where buyers found themselves overextended when interest rates started rising again .”
These restrictions will temper value growth in residential assets . However , she says that regional supply and demand imbalances have the potential to trigger rapid market changes in specific areas .
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