“ High-end properties , particularly those valued above $ 2 million , are expected to recover quickly as wellcapitalised buyers leverage current conditions and a finite supply of elite properties .
“ Overall , 2025 is expected to be a year of steady growth . While we ’ re not looking at the heady days of cycles past , there will be room for significant improvement in conditions , particularly for those who can secure finance and are positioned in the right markets .”
Conisbee ’ s sentiments largely echo those of New Zealand ’ s largest bank , ANZ . In its monthly Property Focus publication released in October , and its Quarterly Economic Update this month economists there picked a stabilisation in residential values by the year ’ s close , followed by a projected increase of 6 per cent in 2025 .
ANZ ’ s chief economist Sharon Zollner says that despite expectations , there remains “ significant uncertainty around the likely pace of recovery in the housing market as mortgage rates continue to decline .” She notes falling mortgage rates , rising unemployment , a fundamental undersupply of houses , changes in tax policy , and affordability constraints as just some of the factors forecasters will observe as they chart a course for the housing market in 2025 .
Another influence driving sales activity will be what ANZ refers to as “ animal spirits ” - market sentiment ' s intangible but powerful influence on buyer behaviour . Recent data suggests that the increase amongst residential purchasers is rising , with mortgage lending enquiries climbing steadily since the RBNZ embarked on its long-awaited easing cycle in August . Anecdotal evidence from real estate agents also points to an emerging “ buy the dip ” mentality , where buyers see the market trough as an entry point before demand rises and prices inevitably escalate .
“ Anecdote suggests buyer interest has picked up meaningfully since the RBNZ started cutting the OCR ,” says Zollner . Mortgage rates have generally declined . Floating rates have dropped by 0.50 per cent , and further decreases in short-term fixed rates indicate that borrowers may find more appealing terms in the near term .
This may all look like great news for borrowers , with further interest rate reductions anticipated . However , ANZ warns we ’ re likely nearing the lowest point for mortgage rates , with markets factoring in cuts to the OCR that could stabilise mortgage lending rates at around 5 – 5.5 per cent .
“ Interest rates are a bit of a moving target ,” Zollner says . However , markets are already pricing OCR cuts all the way down to three per cent – meaning the most significant rate reductions are likely already baked into current retail offerings . This could be a critical window for buyers waiting on the sidelines before rates level off and competition ramps up .
Additionally , Zollner says a fundamental housing shortage nationwide is a problem with no silver bullet solution . Housing supply constraints are tightening , with building consents down by more than 30 per cent from their 2022 peaks , and councils continue to face funding challenges for critical infrastructure . As the supply of new homes slows , the structural undersupply will likely put upward pressure on prices in the long term , contributing to a degree of demand resilience across the market .
“ When the market starts to shift , it can happen quickly , especially with investor interest gaining traction .” Investor-friendly policies , including reduced Loanto-Value Ratio ( LVR ) requirements and reintroduced interest deductibility , also add momentum to this recovery .
Zollner says that while Kiwis can expect a continued recovery , “ there may still be a few bumps in the road , but the fundamentals of demand will keep underpinning the market . We expect prices to stabilise by the end of the year , followed by modest gains over 2025 .”
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