What to expect from NZ’s property market in 2025: expert insights

On balance, Kelvin tells us that it’s still a buyer’s market out there: “We’re seeing listings running at multi-year highs, and when this happens we tend to see property values trend downwards, as we’ve seen in the past six months. It hasn’t been a big slump, but it’s certainly been edging lower”. This downward trend was reflected in Trade Me Property’s December 2024 Property Price Index (PPI), where the average price for home in Aotearoa fell modestly to $849,550, compared to $854,900 in November.

This reflects a number of different factors, Kelvin explains. “For the first half of 2024, we had high mortgage rates, which were holding the market back. And as those started to fall, job losses in the labour market took over as a restraining factor”.

However, Kelvin is quick to note that while property prices might have come down slightly in NZ, he doubts too many buyers are thinking “gee, low how cheap houses are”, and affordability is still a factor for those looking to purchase homes.

Kelvin says that CoreLogic is expecting 2025 to be a year of “conflicting forces” for NZ’s property market.

On one hand, we have falling mortgage rates, which typically lead to increasing sales volumes and upwards pressure on house prices. At the same time, Kelvin believes the continued challenges in Aotearoa’s job market might mean that affordability continues to be an issue, which could restrain property price increases.

Currently, there are still lots of listings out there, and while increased sales volumes might lead to those numbers coming down, “this might not be a quick process.” Kelvin’s conclusion from this is that, all in all, the market will stay in favour of buyers “for a while yet.”

In a word, no. While the market might slightly favour buyers currently, Kelvin thinks it’s “a decent market for everybody at the moment”.

CoreLogic believes that average property prices in NZ might rise by around 5% in 2025, with some areas above this figure, and some below. Similarly, transaction volumes are likely to be slightly higher than they were in 2024, but there will certainly be no “boom” like there was post-COVID.

“If it was me (as a seller),” Kelvin says, “I wouldn’t necessarily be holding off, or rushing either, it’s looking like 2025 will have a fairly steady market that just ticks along”.

For owner-occupiers, Kelvin reminds us that, while the volume of listings on the market might make the current moment seem unappealing as a time to list, “you’d have lots of choice” when buying your next home, meaning you might be able to “drive a better bargain” at that stage in your journey.

Again, Kelvin cautions against rushing into a transaction simply based on the current state of NZ’s real estate market.

“Yes, the finances matter and you want to get a house as affordably as you can, but you need to find something you like.” It can be easy to get swept up in the moment, but Kelvin says he hopes that people don’t think they should “just buy anything” because prices might be a bit lower.

While property price increases in some parts of the country might exceed that 5% figure (more on this later), Kelvin reminds us that mortgage rates are likely to come down further, meaning that you could “lock in a cheaper rate” by holding off. So, there’s more to think about than just property prices right now.

“In general, there’s still going to be a lot of choice out there, and you’re likely to be able to find something you like without needing to rush”, Kelvin explains, and buyers needn’t worry about a post-COVID boom where house prices increase 40% in 18 months.

Kelvin reckons that regional property markets in key centres like Auckland and Wellington may end up slightly below the approximate 5% increase in property prices he’s expecting on average across the Motu. Our most recent PPI showed that Auckland’s average property price in December 2024 was $20,000 lower than December 2023 2023.

This is due to local factors, Kelvin explains. These include public sector job cuts in the capital, and the fact that Auckland still has a decent supply of properties on stream, including new builds coming through. Respectively, these factors may mean that Wellington and Auckland will probably be flatish, or perhaps see property price increases of 1–2%, in 2025.

On Te Waipounamu/South Island, Kelvin believes that Christchurch should be on or around that 5% estimate, with a reasonable balance between supply and demand.

As for cities that might exceed the average for property price growth in 2025, Kelvin points to the likes of Palmerston North, New Plymouth and Invercargill. House prices in these smaller cities might see greater increases due to the combination of their cheaper starting points, and the importance of agriculture in these regions. This sector has not been impacted by labour market woes to the same extent as other industries.

Overall, however, the picture is one of relative stability, and Kelvin is confident in his prediction that “nowhere is going to boom”.