A message from our chief executive
Dear Property Owner,
While some are waiting for the market to change, others have adjusted their position in the market, and currently, we’ re seeing sellers reclaiming control.
Following a challenging period for Kiwi households and the economy, marked by a recession, high borrowing costs and subdued sentiment, positive momentum is building.
The past few months have seen a meaningful shift in activity levels, affordability conditions, and buyer engagement. This suggests the second half of the year may shape up quite differently from the first.
Across the Ray White network, we’ re encouraged by steady month-on-month gains in sales volumes, which indicate that confidence is gradually returning. Our team recorded 2,004 new listings in May – a slight increase over the same time last year, although notably down from April’ s elevated total.
This signals a return to seasonality, but also an important inflexion point for sellers: competition from new stock is easing, and properties fresh to market are capturing the lion’ s share of buyer attention.
Interest rate movements continue to underpin market dynamics. The Reserve Bank’ s( RBNZ) recent 25-basis-point cut to the Official Cash Rate( OCR), taking it to 3.25 per cent, marks the sixth consecutive easing since August last year.
While forward guidance remains cautious – and split among RBNZ committee members – the central bank has revised its own OCR forecasts lower, now projecting a base rate of 2.85 per cent by early 2026.
Financial markets are even more dovish, pricing in the possibility of a drop to 2.50 per cent as early as October this year.
For buyers, this signals that mortgage rates could drift lower in the coming months, not dramatically, but meaningfully. Many households are already benefiting.
Homeowners refinancing at today’ s average two-year rate of 5.05 per cent on a median-priced $ 700,000 home( with a 20 per cent deposit) are saving roughly $ 719 a month($ 8,600 a year) compared to what they were paying when rates peaked above seven per cent in late 2023.
For sellers, this puts cash straight into buyers’ hands, boosting their confidence and translating into increased sales activity.
Adding to this momentum is a new 20 per cent upfront tax deduction for business asset purchases, a boost for New Zealand’ s many small business owners who often use the family home as loan security. The policy could free up equity and confidence, potentially stimulating housing market activity.
However, it’ s not just interest rates and tax policy moving. We’ re seeing signs of improvement in several key economic indicators that contribute to housing demand.
Export prices, particularly dairy, have posted strong gains, which bodes well for regional economies and suggests renewed appetite for property upgrades and investment in lifestyle and rural holdings.
Meanwhile, government moves to streamline the building consent process, including the introduction of a privately owned consent authority, signal a welcome structural reform for the construction and development sector.
Faster approvals and reduced regulatory burdens could unlock the latent housing supply, while easing some of the bottlenecks that have historically constrained growth.
Still, the path ahead is not entirely certain. Global risks persist, inflation remains sticky, and forecasts for economic activity have recently been curtailed.
At home, Kiwis continue to seek stability and security in jobs, lending conditions, and the value of their assets. Buyers are exercising their power wisely, too: They’ re better informed, more condition-driven, and consistently value-focused.
This month’ s Ray White Now explores these dynamics in greater detail. Inside, we delve deeper into the evolving economic landscape and how it’ s influencing buyer and seller behaviour.
The year is increasingly looking to be a game of two halves, and while the first was defined by resilience, the second is likely to reward readiness. Whether you’ re thinking of selling, buying, or simply staying informed, understanding where the market is heading and what’ s shaping that direction is essential.
We hope the insights within this edition empower you to make confident, well-timed decisions in a market that is, finally, regaining its momentum.
Please enjoy our 81st edition of Ray White Now. Regards
Daniel Coulson Chief Executive Ray White New Zealand
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