The 12 days of Christmas
From the ‘ Partridge in a Pear Tree ’ stability bought by easing inflation and softening interest rates to the ‘ Ten Lords A-Leaping ’ of mortgage lending conditions making borrowing more accessible , New Zealand ’ s real estate market is poised for a more predictable year in 2025 .
While we count down to the festive season , challenges remain , but the overall sentiment in New Zealand ’ s real estate market is shifting from volatility and uncertainty to enthusiasm and intrigue . With each new development – whether that ’ s the ‘ Five Golden Rings ’ of Built-to- Rent ( BTR ) projects or the ‘ Seven Swans A-Swimming ’ demand for waterfront homes – the landscape is set for a year of progress – tempered by thoughtful navigation and strategic decision-making .
PARTRIDGE IN A PEAR TREE : MARKET STABILITY
Stability is a foundational element of the housing market , which Kiwis crave after several years of volatility and disruption . The latest data from Statistics New Zealand shows well-contained inflation as we head into Christmas , with modest increases in housing rents , supporting expectations of inflation around two per cent in the coming months . Homeowners can expect to transact under more predictable market conditions , but whether values will see steady growth or minor fluctuation remains to be seen . The RBNZ ’ s action to lower the Official Cash Rate ( OCR ) is already setting the stage for future savings on mortgage bills , encouraging sales activity as buyers and sellers leverage more stable market conditions .
“ Stability is a foundational element of the housing market , which Kiwis crave after several years of volatility and disruption .“
TWO TURTLE DOVES : BUYER & SELLER SENTIMENT
Confidence is starting to return to the market . Real Estate Institute of New Zealand ( REINZ ) data shows a 20 per cent increase in sales activity in October , suggesting buyers and sellers are becoming more active . Despite this , sellers still need to be strategic in meeting the market . The oversupply contributing to the ‘ buyer ’ s market ’ is shrinking , although new listings are still surging by 20-odd per cent year-on-year . For buyers , conditions support securing a home before competition intensifies in the new year .
THREE FRENCH HENS : MIGRATION & HOUSING DEMAND
Migration is a significant driver of housing demand . Adding new residents bolstered population numbers through the first half of the year , yet expected economic benefits were thin on the ground , as more people did not necessarily translate into greater productivity . This saw a tightening of the rental market , with average rental rates stabilising and supply remaining steady . The summer months will be critical in testing the resilience of the rental market . At the same time , house price predictions indicate upward trends driven by migration and constrained housing supply . Urban centres like Auckland and Christchurch are likely to continue to see strong demand , while regional areas may benefit from migration overflow .
FOUR CALLING BIRDS : GOVERNMENT POLICY CHANGES
Government policy changes , such as the introduction of Debt-to-Income ( DTI ) restrictions and the restoration of mortgage interest deductibility for investors , will significantly shape the property market . While the DTI rules have put a cap on borrowing for leveraged buyers , particularly investors , easing Loan-to-Value ( LVR ) rules promote greater sale sales activity . Investors may be
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