The numbers tick up to 5.1%

Unemployment among Kiwis remains on an upward trajectory as New Zealand continues to navigate conflicting market forces.
On Wednesday, the government department Statistics New Zealand released the latest unemployment report, showing that the unemployment rate had risen to 5.1% in the December 2024 quarter, up from 4.8% in the prior three months. Meanwhile, many advisers have described 2025 thus far as busier than ever amid the current low interest rates.
"The unemployment story is quite interesting, because as the interest rates come down, people have a lot more money to spend. But a lot of people are cautious. They don't want to spend a lot of money because they're worried about job security," Jamie Sanderson (pictured above left), founder and director of Auckland-based advisory firm Jamie & Co., told the New Zealand Adviser. "So maybe they're holding off. I don't think people will spend as much [going forward.] There's too much of a risk."
The current employment rate is 67.4%, down from 69% a year ago, according to the data. For the year, unemployment rose to 156,000, up from 123,000 last year. That's a loss of 33,000 jobs. Men accounted for 85% of the annual employment losses, signaling declines in male-dominated industries.
"The unemployment rate is restrictive," said Kelvin Davidson (pictured above right), an economist at CoreLogic NZ. "The housing market is not going to do well with job losses.
"There are things supporting people right now, like lower interest rates," he continued. "But on the flip side, there are restraints, like more job losses. In general, we're looking at a subdued outlook for the housing market.
Despite the increasing unemployment rates, the economist added that there's some optimism in the market.
"Losing your job is not great," Davidson said. "But the current unemployment rate is lower than what it has been in the past. And a lot of people are anticipating that this will be as bad as it gets."
Conflicting forces
While lower interest rates and unemployment are just part of New Zealand's greater economic puzzle, there are other factors at play as well.
"There's a lot of factors pushing up against each other," Davidson said.
New Zealand's debt-to-income ratio limits the amount of money a borrower can take out for a mortgage relative to their income.
"There's also a lot of stock out there at the moment," the economist added. "It's definitely still a buyers’ market."
At the same time, many advisers report being busier than ever at the start of 2025 thanks to lower interest rates.
"A lot of people are contacting us to see if they can get a better deal," Sanderson said. "Whether that means refinancing, or looking at their bank to see if they're getting a fair option. That puts money back in their pockets.
"Unemployment is interesting," he added. "Because it's something most people can't plan for."
Still, the adviser said there are things advisers can do to help prepare their clients.
"The first step, before involving the bank, is for the adviser to tell people to look at their monthly budget," he said. "We'll say, 'when was the last time you actually reviewed how much you spend on a monthly basis?' Then the second step, as an adviser, you can tell them to hold back if they're struggling to make monthly payments.
"Then there are avenues and channels advisers can go through to work with the banks if the borrower loses their job," Sanderson added.
One example, he said, would be to make interest-only payments until the borrower finds a new job. But Sanderson warned that’s only a short-term fix, as the client will have to make more payments down the line in order to avoid paying more on the balance.
"As an adviser, it's all about understanding what options are available to the clients,” Sanderson said.