A message from our chief executive
Dear Property Owner,
Fireworks will wait until November, as we cross into the second half of 2025, the performance of our residential property market continues to confound those seeking a dramatic recovery.
While sales activity is up 17 per cent year-on-year, property prices have barely budged. It begs the question – how can the market be busy, yet so still?
The answer lies in the interplay of interest rates, sentiment and policy.
Since 2021, household wealth has plateaued, compounded by stagnating property values – Kiwis’ most significant store of wealth and leverage. Until we see a more meaningful lift in wage growth, stronger population momentum, or more decisive monetary easing, buyers are likely to remain cautious, and the long-term average of 3.50 per cent annual real house price growth will remain out of reach. circa 60 per cent of New Zealand’ s trading partners, including ourselves, Indonesia, Japan, and the European area.
Domestically, export sectors are enjoying high commodity prices, and business confidence continues to rebound. Though employment levels have dipped, many commentators view this as a lagging indicator, not a structural decline.
Meanwhile, whispers of policy change are stirring interest at the upper end of the market. New Zealand First leader Winston Peters’ recent comments suggest a potential softening of the foreign buyer ban, particularly for high-value homes – a policy championed by the National party during the last election.
While such a move has the potential to impact less than 0.50 per cent of the country’ s total housing stock, it may well have an outsized impact on premium segments, including Queenstown and pockets of Auckland.
At a national level, however, the market remains subdued, with capital growth constrained by tighter regulation, among other things. However, recent policy shifts, including the return of interest deductibility and a softened bright-line test, are supporting investment activity by easing some of the operational pressure around compliance, rates and insurance costs.
Some may view this‘ holding pattern’ as a disappointment, particularly after early forecasts pitched 2025 as a year of rebound. But, flat doesn’ t have to mean fragile. In fact, a stable, neutral market allows both buyers and sellers to act with greater clarity, free from the pressure of rapidly shifting conditions.
Source: REINZ, Macrobond, Westpac
Still, this caution is not the same as disinterest. Across our network, we’ re seeing consistent engagement from buyers, particularly in key centres including Auckland and Christchurch.
Auction attendance is strengthening, and the ratio of bidders is trending at an encouraging 3:1. It’ s clear that the market is active, just more measured.
This behaviour aligns with the growing belief that we’ ve hit the interest rate trough.
For the first time in a long time, we are seeing the return to true seasonality, where spring listings matter and timing becomes tactical rather than emotional. Perhaps that’ s the silver lining. After a decade of extremes – booms, busts, lockdowns, and liquidity, we have the opportunity now to engage with a market that’ s steady, not spiking.
We hope this edition equips you with the insight and confidence to explore that opportunity with clarity.
Please enjoy our 83rd edition of Ray White Now.
Although the Reserve Bank( RBNZ) disappointed some by holding the Official Cash Rate( OCR) steady in July, all eyes are now on the 20 August announcement, which could deliver the further rate cut the market has been waiting for.
With around half of all fixed-rate mortgages due to reprice by the end of the year, borrowers stand to benefit from lower servicing costs, potentially freeing household budgets and unlocking deferred demand.
There are broader reasons for optimism, too. International trade uncertainty is clearing, with the U. S. announcing deals covering
Daniel Coulson Chief Executive Ray White New Zealand
RAY WHITE NOW NEW ZEALAND | 4