Steady market activity points to recovery, not boom, Cotality says
New Zealand’s housing market continues to stabilise in 2025, with key indicators pointing to a measured recovery, according to Kelvin Davidson (pictured), chief property economist at Cotality NZ.
While sales volumes and values are improving, elevated listings and subdued rent growth mean buyers still have the upper hand, Davidson said in Cotality’s latest Monthly Property Insights.
The housing market’s stabilisation comes as New Zealand navigates a fragile economic recovery.
New Zealand’s housing market is stabilising amid easing inflation and interest rate cuts, which are boosting buyer confidence. However, global trade tensions – driven by renewed US tariffs under President Donald Trump – pose risks to exports and broader economic momentum.
Sales volumes lift from 2023 trough
House sales have picked up substantially from last year’s lows.
“Sales volumes – a national total of more than 83,000 in the past 12 months, up from the trough of less than 63,000 in mid-2023,” Davidson said. “There’s been pretty consistent growth for a number of months now, but the low starting point means they’re still a touch below ‘normal’.”
Modest house price growth continues
Property values rose 0.3% in April, the fourth consecutive monthly increase, indicating the market downturn is over—though growth remains modest.
Hamilton and Christchurch recorded the strongest performance among the main centres in April.
High stock levels keep buyers in control
Despite seasonal norms for new listings, the market remains well-stocked, giving buyers significant leverage.
“The weekly flows of new listings coming onto the market so far in 2025 have been pretty normal… but the stock of available listings for sale remains elevated,” Davidson said. “Buyers retain a lot of the pricing power for now.”
First-home buyers and investors both active
First-home buyers reclaimed market strength in April, while lower mortgage rates are also drawing mortgaged investors back into the market.
“First-home buyers were strong again in April, accounting for nearly 27% of property purchases,” Davidson said. “But mortgaged multiple property owners also remain on the comeback trail… accounting for 24% of deals in April, with lower mortgage rates a key factor.”
Rent growth slows, favouring tenants
Rental inflation is subdued, a trend that benefits tenants but presents challenges for landlords.
“Housing rents – these were only up by 0.6% in the year to March (MBIE bonds data)… This is a challenge for investors at present, but obviously great for tenants,” Davidson said.
Lending activity grows amid rate fixing shift
Mortgage lending volumes are rising, with many borrowers now locking in longer-term rates as interest rates ease.
“Overall activity continues to rise…,” Davidson said. “There’s a wave of ‘churn’ activity coming through as borrowers previously on floating or short-term fixed rates potentially start to fix longer again.”
Economic outlook still mixed despite green shoots
Davidson noted some signs of economic improvement, but uncertainty – especially from tariffs – remains high.
“There are some ‘green shoots’ starting to poke through for a range of monthly activity measures…,” he said. “But it’s early days yet – with tariff uncertainty still high – and the cutting cycle for the official cash rate probably has a little further to run.”
Sales expected to climb in 2025 despite headwinds
Cotality’s forecasts remain unchanged: a gradual increase in sales volumes and a moderate 5% rise in house prices.
“Our central expectation that property sales volumes will rise from around 82,000 in the 2024 calendar year to about 92,000 this year remains on track… An indicative increase in house prices this year of 5% or so also remains plausible, but keep in mind that some areas will be lagging and others growing a bit more strongly,” Davidson said.
