Are New Zealand property prices going up in 2025?

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New Zealand's residential property market is showing signs of stabilization after a significant correction, with modest growth expected throughout 2025.

As we reach mid-2025, the New Zealand property market is at a turning point. After falling nearly 20% from their late-2021 peak, property prices have begun to stabilize and show early signs of recovery. The market is benefiting from aggressive interest rate cuts by the Reserve Bank of New Zealand, though high inventory levels and affordability constraints continue to temper growth expectations.

If you want to go deeper, you can check our pack of documents related to the real estate market in New Zealand, based on reliable facts and data, not opinions or rumors.

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

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A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in New Zealand. If you'd like to learn more about us, you can check our presentation page.

How much have New Zealand property prices increased in 2025?

New Zealand property prices have shown modest growth in 2025, with the national median value rising approximately 0.3% in February after months of decline.

As of June 2025, the median property value in New Zealand ranges between $807,164 and $914,504, depending on the data source. This represents a decline of 1.3% to 1.6% compared to the same time last year. However, the market has turned a corner after bottoming out in late 2024, with February 2025 marking the first meaningful monthly increase in over a year.

The recovery is being driven by aggressive interest rate cuts from the Reserve Bank of New Zealand, which has reduced the Official Cash Rate by 225 basis points since August 2024 to 3.25% as of May 2025. This has made mortgages significantly more affordable, with rates dropping nearly 20% from their 2023 peaks.

Regional variations are significant. Christchurch is leading the recovery with prices up 4.03% year-on-year, while Auckland and Wellington continue to struggle, down 3.85% and 5.49% respectively. Some smaller regions like Southland have seen spectacular growth of 17.7%, though this is from a lower base.

Despite the recent upturn, property values nationally remain 16.3% to 16.9% below their January 2022 peak, offering opportunities for buyers who missed out during the boom years.

Where in New Zealand are property prices rising the fastest in 2025?

Regional markets outside the main centers are experiencing the strongest property price growth in New Zealand as of mid-2025.

Southland leads the pack with an impressive 17.7% year-on-year price increase, followed by Gisborne at 13.4%, Northland at 8.1%, and Otago at 8.1%. These regions are benefiting from their relative affordability and lifestyle appeal as remote work continues to enable location flexibility.

Among the main centers, Christchurch stands out as the best performer. The Canterbury region has seen prices rise 4.03% year-on-year to a median of $697,000. Christchurch property values are now just $4,000 below their June 2022 peak, demonstrating remarkable resilience compared to other major cities.

West Coast suburbs are showing particularly strong momentum, with Blaketown up 21.2% year-on-year, Runanga up 20%, and Cobden up 15.7%. These affordable areas are attracting buyers priced out of larger centers.

In contrast, Auckland and Wellington continue to underperform significantly. Wellington has been hit hardest, with values down 24.6% from peak due to public sector job cuts and oversupply. Auckland's high inventory levels, including completed new builds, are keeping price growth suppressed despite being the nation's largest market.

What are the property price forecasts for New Zealand in 2026?

Property prices in New Zealand are forecast to rise 5% to 6% in 2026, building on expected gains of 3.8% to 6% in 2025.

Major banks and economists are largely aligned in their predictions for continued modest growth. ANZ expects prices to increase 6% in 2025 and 5% in 2026, while CoreLogic forecasts approximately 5% growth in 2025. These projections represent a measured recovery rather than a return to the rapid appreciation seen during the 2020-2021 boom.

The recovery trajectory varies significantly by region. Auckland and Wellington are not expected to return to their previous peaks until 2028 and 2031 respectively, according to recent analysis. This extended recovery timeline reflects the severity of their corrections, with both cities still trading more than 20% below their highs.

Several factors support the moderate growth outlook for 2026. The Reserve Bank is expected to continue cutting interest rates, with the Official Cash Rate potentially reaching 2.5% by late 2025. This will further improve mortgage affordability and support buyer demand. Economic growth is projected at 2.2% to 2.6% annually from 2026 onwards, providing a stable backdrop for the property market.

However, growth will be constrained by persistent affordability challenges, with the income-to-house price ratio remaining at 6.7 times - well above the healthy range of 3-5 times. High inventory levels and new debt-to-income ratio caps will also prevent a return to boom conditions.

Which property types are experiencing the strongest price growth?

Standalone houses in affordable suburbs are leading New Zealand's property market recovery in 2025, significantly outperforming apartments and townhouses.

According to market data, 62% of suburbs are seeing flat or rising values for standalone houses in the past three months, demonstrating broad-based recovery in this segment. The strongest gains are concentrated in detached housing within more affordable price brackets, as buyers take advantage of lower mortgage rates to upgrade from apartments or enter the market for the first time.

This trend reflects changing buyer preferences post-pandemic, with many seeking more space and private outdoor areas. The work-from-home culture has made larger homes more desirable, even if they're located further from city centers. First-home buyers, who represent 25.5% of all purchases, are particularly active in this segment.

In contrast, the apartment and townhouse markets are experiencing more subdued and uneven growth patterns. These property types are facing headwinds from oversupply in some areas, particularly in Auckland where numerous apartment developments have been completed recently. The rental market softness is also impacting investor demand for these property types.

It's worth noting that regional variations are significant. In Wellington, all property types continue to struggle due to public sector job cuts and general economic uncertainty. Meanwhile, in growth regions like Southland and Otago, even modest homes are seeing double-digit appreciation as lifestyle buyers compete for limited stock.

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How have interest rate cuts in 2025 affected property prices?

The Reserve Bank of New Zealand's aggressive rate cuts have stabilized the property market and sparked early signs of price recovery in 2025.

Since August 2024, the RBNZ has cut the Official Cash Rate by 225 basis points, bringing it down to 3.25% as of May 2025. This dramatic easing cycle has translated into mortgage rates falling nearly 20% from their 2023 peaks, making home ownership significantly more affordable for buyers.

The impact on the market has been measured but positive. Property sales volumes increased 10.8% year-on-year in November 2024 and have continued to trend upward through early 2025. More importantly, property values returned to growth in February 2025 with a 0.3% monthly increase - the first meaningful rise in over a year.

Banks are passing on these rate cuts to borrowers, with many now offering rates below 5% for shorter-term fixes. This has improved borrowing capacity, though new debt-to-income ratio caps are preventing the kind of excessive lending seen during the 2020-2021 boom. The share of longer-term fixed mortgages is increasing, reflecting borrower confidence that rates have peaked.

Despite lower rates stimulating demand, the recovery remains subdued due to high inventory levels. Over 30,000 properties are currently listed for sale nationally - about 25% above the five-year average. This abundance of choice is keeping price growth modest and giving buyers strong negotiating power. It's something we analyze in depth in our New Zealand property pack.

What impact is high inventory having on prices in 2025?

Record-high property inventory levels are acting as a significant brake on price growth across New Zealand in 2025, creating a buyer's market despite improving demand.

As of early 2025, there are over 32,000 properties listed for sale nationally - levels not seen since 2015. This represents an 18.9% increase year-on-year and is approximately 25% above the five-year average. The surge in listings came after sellers jumped into the market in January 2025, with new listings up 21.2% compared to the previous year.

Key regions are experiencing particularly elevated inventory levels. Wellington, Bay of Plenty, and Auckland have all seen listing increases exceeding 10% year-on-year. In Auckland, the combination of existing property listings and completed new-build apartments has created an oversupply situation that's keeping prices suppressed despite the city's economic importance.

This inventory overhang is having several effects on the market. Properties are taking longer to sell, with the national median days-to-sell increasing to 42 days. Sellers are having to be more realistic with pricing expectations, with many properties selling below asking price. The abundance of choice means buyers can be selective and negotiate harder on price and conditions.

Market experts suggest this excess inventory needs to be absorbed before more meaningful price growth can occur. ANZ economists expect prices to "start to lift more meaningfully over the second half of the year once the excess inventory has been worked through." Until then, the buyer's market conditions are likely to persist, keeping annual price growth in the modest 3-5% range rather than the double-digit gains seen in previous cycles.

How do current prices compare to five years ago?

New Zealand property prices have increased approximately 17.1% over the past five years despite the recent correction, demonstrating the market's underlying resilience.

In March 2020, just before the COVID-19 pandemic, the national median property value stood at $689,353. As of early 2025, this figure has risen to between $807,164 and $914,504 depending on the data source, representing substantial gains despite the significant downturn since late 2021.

The five-year journey has been far from smooth. Prices surged dramatically during 2020 and 2021, driven by ultra-low interest rates and pandemic-induced demand, reaching a peak approximately 40% above pre-COVID levels. However, the subsequent correction has erased much of these gains, with values now sitting 16-17% below the January 2022 peak.

Different regions have experienced vastly different five-year trajectories. Auckland's median price has risen from approximately $850,000 to $1,000,000, while some regional areas have seen even stronger growth. For perspective, someone who bought a median-priced property in 2020 has seen average annual gains of about $32,600, though much of this is paper wealth given the recent correction.

Looking at the longer 10-year horizon, prices have increased approximately 60% in nominal terms, with the median rising from around $455,000 in 2015. However, experts caution that the old rule of "property prices double every 10 years" no longer applies, with future growth expected to be more modest at 5-6% annually.

Are property prices more affordable now than at the 2021 peak?

Property prices in New Zealand are substantially more affordable than at the 2021 peak, with values down 16-17% nationally, though affordability remains stretched by historical standards.

The correction has been particularly severe in Auckland and Wellington, where prices remain more than 20% below peak levels. A buyer purchasing in Wellington today would pay approximately $250,000 less than at the market peak, representing significant savings. Similarly, Auckland buyers are saving around $250,000 compared to late 2021 prices.

However, affordability challenges persist. Despite lower prices, higher mortgage rates mean monthly payments haven't decreased proportionally. The income-to-house price ratio at 6.7 times remains well above the healthy range of 3-5 times, indicating prices are still stretched relative to incomes.

First-home buyers are finding more opportunities, now representing 25.5% of all purchases compared to 20% at the peak. They're benefiting from less competition, more choice, and the ability to use KiwiSaver funds more effectively in a cooler market. We explore these opportunities in detail in our New Zealand property pack.

We made this infographic to show you how property prices in New Zealand compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.

What are banks and economists predicting for the rest of 2025?

Banks and economists are largely aligned in predicting modest property price growth of 4-6% for the full year 2025, with stronger momentum expected in the second half.

ANZ has upgraded its forecast to 6% growth for 2025, up from 4.5% previously, citing front-loaded OCR cuts and signs that housing market momentum is shifting. CoreLogic expects approximately 5% growth, describing it as a "muted recovery by historical standards." Independent economists surveyed by Reuters predict a median 5% increase.

The consensus view is that the market has already bottomed out, with February 2025's 0.3% monthly gain marking the turning point. However, economists emphasize this won't be a rapid rebound like previous cycles. High inventory levels need to be absorbed first, with ANZ noting prices will "start to lift more meaningfully over the second half of the year once the excess inventory has been worked through."

Several factors underpin these moderate forecasts. The RBNZ is expected to cut rates further, potentially bringing the OCR to 2.5% by year-end. Economic growth is projected at 2.2% for 2025, providing a supportive backdrop. Migration has stabilized, and the labor market, while soft, is expected to improve gradually.

Banks are particularly focused on the impact of new debt-to-income ratios, which could constrain lending once mortgage rates fall further. This regulatory tool is designed to prevent another unsustainable boom, keeping price growth within sustainable bounds even as conditions improve.

How does New Zealand's property market compare to Australia in 2025?

New Zealand's property market is recovering more slowly than Australia's in 2025, reflecting broader economic disparities between the two countries.

While New Zealand property prices are forecast to rise 4.5-6% in 2025, Australian markets have been experiencing steadier growth since early 2023. The key difference is monetary policy - the Reserve Bank of New Zealand has cut rates aggressively to 3.25%, while the Reserve Bank of Australia is expected to keep rates higher at 3.35%, reflecting different economic conditions.

New Zealand's correction was much sharper, with prices falling nearly 20% from peak compared to Australia's more modest declines. This means New Zealand has more ground to recover, with Auckland and Wellington still trading 20%+ below their peaks while major Australian cities have shown more resilience.

Affordability remains a challenge in both countries, though New Zealand's price-to-income ratios are generally higher. Both Sydney and Auckland are among the least affordable cities globally, but New Zealand's smaller economy and lower wages make the burden relatively greater for Kiwi buyers.

One notable trend is the significant migration of New Zealanders to Australia, driven by better job opportunities and wages. This "brain drain" is impacting demand in New Zealand while adding to pressure in Australian markets. Over 50,000 New Zealand citizens relocated to Australia in the past year, the highest level in over a decade.

Looking ahead, ANZ forecasts suggest New Zealand's market will outperform in 2025-2026 as it recovers from a lower base, but Australia's economic fundamentals remain stronger overall.

Which areas offer the best value for property investment in 2025?

Regional centers and affordable suburbs in major cities offer the best value for property investment in New Zealand as of mid-2025.

Christchurch stands out among major centers, with median prices at $697,000 - significantly below Auckland and Wellington - yet showing solid 4% annual growth. The city is just $4,000 below its previous peak, suggesting limited downside risk. Its recovery is being driven by relative affordability, steady employment, and less exposure to public sector cuts.

1. Invercargill and Southland - With 17.7% annual growth and median prices around $554,000, this region offers strong yields and capital growth potential from a low base.
2. Gisborne - Up 13.4% year-on-year, benefiting from lifestyle appeal and remote work trends while remaining affordable.
3. Dunedin - Despite recent modest declines, student housing demand provides steady rental yields and long-term stability.
4. Hamilton - At 1.5 hours from Auckland, it offers value with positive price momentum and growing employment opportunities.
5. Palmerston North - University town with stable rental demand and prices well below national median.

For investors, the key is finding areas with solid fundamentals - employment growth, population increase, and infrastructure development. Avoid Wellington given ongoing public sector uncertainty and high inventory. Auckland suburbs on major transport routes offer long-term potential once the current oversupply is absorbed.

First-home buyers should focus on standalone houses in affordable suburbs showing price growth, as these are leading the recovery. The sweet spot appears to be properties priced 20-30% below the regional median in areas with good amenities and transport links.

Will New Zealand see another property boom like 2020-2021?

New Zealand is unlikely to experience another property boom like 2020-2021 in the foreseeable future, with structural changes ensuring more sustainable growth patterns.

The 2020-2021 boom was driven by an unprecedented combination of factors that won't be repeated: emergency-level interest rates near zero, massive fiscal stimulus, closed borders concentrating wealth domestically, and a sudden shift to remote work. Property prices surged over 40% in just 18 months, creating an unsustainable bubble.

Today's environment is fundamentally different. The Reserve Bank has introduced debt-to-income ratios specifically to prevent excessive lending, capping borrowing at 6-7 times income. Interest rates, while falling, won't return to emergency lows - the RBNZ is targeting a neutral rate around 2.5-3%, well above the 0.25% seen in 2020.

Population dynamics have also shifted. Net migration has slowed significantly, with many skilled workers leaving for Australia. The foreign buyer ban remains in place, removing a source of demand that previously drove prices higher. Banks are also more cautious, with stricter lending criteria even as rates fall.

Market experts universally predict moderate, sustainable growth ahead. The "old rule" that house prices double every decade is considered obsolete. Instead, economists forecast annual growth of 5-6% over the medium term - healthy appreciation but nothing like the speculative frenzy of recent years. This measured pace is ultimately better for market stability and affordability. For detailed analysis of these trends, check our New Zealand property pack.

Conclusion

Yes, property prices are going up in New Zealand, but the growth is modest and measured rather than spectacular.

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. CoreLogic NZ - Property Values Return to Growth in February 2025
2. Opes Partners - New Zealand Property Market Analysis 2025
3. ANZ Property Focus Reports 2025
4. Reuters - NZ Home Prices Forecast to Rise 5% in 2025
5. Global Property Guide - New Zealand Real Estate Market Analysis
6. QV House Price Index April 2025
7. OneRoof House Price Report February 2025
8. CBRE New Zealand Real Estate Market Outlook 2025
9. RealEstate.co.nz - January 2025 Market Update
10. Najib Real Estate - 2025 NZ House Price Guide