“ It ’ s fitting that 2025 is the Year of the Snake in the Chinese zodiac – a symbol of transformation , adaptability and strategic moves . This aligns remarkably with the changing dynamics of the housing market , where agility and foresight will be key to success in 2025 .”
EASING INTEREST RATES : A NEW CHAPTER
New Zealand ’ s monetary policy landscape is shifting following one of the most aggressive interest rate tightening cycles in recent history . The Reserve Bank of New Zealand ( RBNZ ) has trimmed the Official Cash Rate ( OCR ) to 4.25 per cent , indicating a clear downward trajectory expected to continue into 2025 .
Forecasts suggest further reductions , with the OCR potentially reaching 3.50 per cent by the end of next year .
“ Lower borrowing costs are already offering new energy to the property sector , giving buyers more confidence , coupled with cooling inflation that provides more purchasing power in their back pockets ,” Coulson says .
“ While the full impact of falling mortgage lending rates may not be felt until we ’ re further into 2025 , the groundwork laid over the next few months will define market conditions for the year ahead . For buyers , it means the potential to leverage still-excellent buying conditions before the wind changes , and for sellers , it ’ s a chance to meet renewed demand head-on .
“ While the housing market is improving , affordability continues to be a significant constraint on price growth . Kiwis are unlikely to experience the same purchasing motivations seen during the ultra-low interest rate and pandemic-driven housing boom .”
Source : REINZ , Statistics New Zealand , RBNZ
BALANCING SUPPLY AND DEMAND
Market activity has started to level off , with unsold stock steadily declining and the number of days listings spend on the market dropping for the first time in five months . “ We ’ re witnessing a tighter market as buyer activity increases , leading to healthier conditions that benefit everyone .”
Despite this , Coulson says that the pipeline for new builds and residential development continues to dwindle , reflected by building consent numbers at a five-year low . “ We ’ re watching the impact of this reduction in future housing stock closely , as it will likely increase competition for existing properties , marking today ’ s conditions particularly attractive for sellers .”
“ Local and central governments continue to struggle with infrastructure supply constraints , making it increasingly difficult to build new homes . This has become so contentious in some areas that new homes no longer receive Code Compliance ( CCC ) certification until upgrades to essential facilities , such as wastewater processing , can accommodate additional demand .
“ This bottleneck restricts housing supply further , intensifying the attractiveness and level of competition for existing properties .”
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