Authored by the expert who managed and guided the team behind the New Zealand Property Pack
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What is happening in New Zealand’s real estate market? Are prices soaring or stabilizing? Is Auckland still a magnet for international buyers? How are New Zealand’s government policies shaping real estate taxes and regulations in 2025?
These are the questions we hear every day from industry experts, homebuyers, and sellers across the country, from Wellington to Christchurch and beyond. Maybe you’re curious about these trends too.
We understand this because we stay closely connected with local experts and individuals like you, exploring the New Zealand real estate market daily. That’s why we crafted this article: to deliver clear insights, thoughtful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to reach out with your thoughts or comments, and we’ll strive to enhance this content for you.
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1) Auckland's rental yields will rise as demand for rental properties grows
Rental yields in Auckland are on the rise as more people look for places to live.
Auckland's population has grown by 47,000 people in just one year, thanks to a surge in international immigration. This influx means more folks are looking for homes, and with an average of three people per household, around 15,667 new homes are needed. But here's the catch: only 15,263 homes were built, leaving a gap of 404 homes. This shortfall is pushing up rental demand as more people compete for fewer available properties.
Homeownership in New Zealand has hit a low, with rates dropping to below 60% for the first time since 1945. This trend indicates that more people are choosing to rent instead of buy, further boosting the demand for rental properties. It's a tough market out there, with nearly half of all renters spending over 30% of their income on rent, making it hard to save for a home deposit.
For those considering buying property in Auckland, this means rental properties are in high demand. The city's growing population and the current housing shortage are creating a competitive rental market. With fewer people able to afford buying homes, renting becomes the more viable option, driving up rental yields.
Investors might find this an opportune time to enter the rental market. The combination of a growing population, a housing shortfall, and declining homeownership rates suggests that rental properties will continue to be in demand. This could lead to improved rental yields as more people look for places to live in Auckland.
Sources: Interest.co.nz, 1 News, Barfoot & Thompson
2) Property prices in regional areas will rise slightly as people relocate from major cities
People are increasingly choosing to leave major cities like Auckland, Wellington, and Christchurch.
One big reason for this shift is the rise of remote work, which lets people live anywhere with good internet. This means they can now choose more affordable and spacious homes in regional areas instead of being tied to city life.
Regional areas have become more appealing thanks to improved infrastructure and amenities, partly due to the Provincial Growth Fund. This fund has boosted the productivity and livability of these areas, making them attractive to new residents.
Media coverage has also played a role by highlighting the benefits of regional living, such as a better quality of life, lower costs, and a more relaxed pace. These factors have sparked growing interest in moving away from the hustle and bustle of city life.
Internal migration stats show a clear trend: people are leaving cities for regional areas. For example, Auckland has seen a notable outflow of residents, while places like Selwyn and Tauranga City are gaining new inhabitants.
This movement has naturally led to increased demand for housing in regional areas, causing property prices to rise. Real estate agents report that lifestyle changes and the search for more affordable housing are key motivators for buyers.
Sources: Infometrics, OECD iLibrary, Trade Me
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of New Zealand. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
3) Regional towns will see higher rental yields as they attract more remote workers
Regional towns in New Zealand are becoming a hot spot for remote workers, leading to higher rental yields.
Take Taupo District, for instance, where the rental yield for a 2-bedroom unit jumped from 4.6% in early 2022 to 7.5% by the end of 2023. Similarly, Hastings District saw a rise in yields for a 3-bedroom house from 4.0% to 5.8% over the same period. These numbers show how attractive these areas have become.
Why the shift? Well, more remote workers are moving to these towns, thanks to better infrastructure and amenities. The government is backing this with initiatives like the Provincial Growth Fund and Regional Deals to boost economic growth and infrastructure.
Media and social media are also playing their part by showcasing the lifestyle perks of regional living. This buzz is drawing in more remote workers, which in turn is driving up demand for housing and rental properties.
Plus, with improvements in internet and technology infrastructure, working remotely in these areas is now more feasible than ever. This tech boost is a big reason why rental yields are on the rise.
Sources: CoreLogic, OECD iLibrary, Beehive.govt.nz
4) Wellington's rental yields will dip slightly as homeownership rises over renting
In 2025, Wellington's rental yields are expected to decline slightly as more people opt to buy homes instead of renting.
Over the past few years, the New Zealand housing market, including Wellington, has been on the mend. House prices are forecasted to rise by 7% in 2025, making buying more appealing. This recovery is fueled by falling mortgage rates and easing economic pressures, which are making homeownership more attractive to potential buyers.
Rental demand is also on the decline. Rents increased by only 1.0% in the year leading up to November 2024, which is well below the long-term average of 3.2%. This slowdown is partly due to a decrease in net migration and more rental listings becoming available. As buying becomes more feasible, fewer people are looking to rent.
More mortgage options and favorable interest rates are making it easier for people to switch from renting to owning. Short-term mortgage rates have fallen significantly, boosting borrowing capacity and improving cash flow for buyers. This trend is likely to continue, encouraging even more people to buy homes.
Government incentives for first-time homebuyers, while not specific to Wellington, are also playing a role. These incentives provide financial assistance and subsidies, making it easier for first-time buyers to enter the market. This is contributing to the increase in homeownership rates.
Sources: CoreLogic, MPA Magazine, Kiwibank
5) New property tax rules will affect investor strategies in the coming years
In New Zealand, recent property tax changes are reshaping how investors approach real estate.
One big shift is the extension of the bright-line test from five to ten years. This means investors need to hold onto properties longer to avoid capital gains tax, pushing them towards longer-term investment strategies. It's a move that has many thinking twice about quick flips and more about steady, long-term growth.
Another significant change is the reinstatement of interest deductibility for landlords. By 2024, landlords can claim 80% of their interest costs, and by 2025, it jumps to 100%. This makes property investment more appealing by lowering the tax burden, which could lead to more rental properties on the market and potentially shift rental prices.
There's also the new change-of-use rule, which affects properties switching between being a main home and an investment. If a property isn't used as a main home for over 12 months, owners must pay income tax on part of the profit. This rule is making investors rethink how they use their properties, as it adds a new layer of tax planning.
These changes are not just numbers on paper; they are actively influencing the real estate landscape. Investors are now more cautious, considering how these rules will impact their returns and strategies. The focus is shifting towards long-term stability and strategic planning.
For those looking to buy property in New Zealand, understanding these tax changes is crucial. They are not just affecting current investors but also shaping the future market dynamics, making it essential to stay informed and adapt strategies accordingly.
Sources: William Buck, Loan Market, Vertigro
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6) Housing demand will be shaped by immigration patterns in areas with strong job markets
Immigration patterns are reshaping housing demand in areas with thriving job markets.
In New Zealand, net migration hit a record 136,000 new arrivals by October 2023, before dropping to 67,000 by July 2024. This wave of newcomers has put pressure on the housing market, especially in cities like Auckland and Wellington, where job opportunities are abundant. Auckland, a hotspot for immigrants, has seen house prices soar as a result.
There's a clear link between immigration and housing prices in New Zealand. When the population grows, house prices tend to rise, with elasticity estimated between 0.4 and 0.65. This means that as more people move in, the cost of homes goes up.
Immigrants are drawn to regions with strong economies, which further fuels housing demand. Sectors like construction, engineering, health, and aged care are booming with increased non-NZ-citizen workforces, highlighting the need for workers in these fields.
As more people settle in these prosperous areas, the demand for housing continues to climb. This trend is particularly evident in Auckland, where the influx of immigrants has led to significant housing market activity.
Understanding these dynamics is crucial for anyone considering buying property in New Zealand. The interplay between immigration and housing demand is a key factor in the country's real estate landscape.
Sources: Pathways NZ, Motu Economic and Public Policy Research, Infometrics
8) Demand for smaller, low-maintenance homes will rise due to an aging population
New Zealand's population is aging rapidly, with 20% expected to be 65 or older by 2033.
This shift means more people are entering retirement age, and their housing needs are changing. Many older adults are looking to downsize from larger family homes to smaller, more manageable spaces. However, they often face challenges due to a lack of suitable properties.
The Retirement Commission has pointed out the need for more affordable and accessible housing options for seniors, which includes smaller, low-maintenance homes. This is crucial as maintaining a large home can be costly and challenging for retirees, especially when balancing other expenses like rent and groceries.
Additionally, the rise in single-person and couple-only households among the elderly further supports the demand for compact living spaces. This has led some to consider tiny homes as a viable, affordable option.
In many cases, retirees are looking for homes that offer convenience and ease of living. The trend is particularly notable in urban areas where proximity to amenities and healthcare services is a priority.
As the population continues to age, the demand for these types of homes is expected to grow, making it a key consideration for anyone looking to invest in property in New Zealand.
Sources: NZ Herald, Auckland University, Infometrics
We did some research and made this infographic to help you quickly compare rental yields of the major cities in New Zealand versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
9) Demand will surge in Auckland's outer suburbs as remote work becomes more common
In 2023 and 2024, remote work surged in New Zealand, with nearly 20% of adults working mostly from home.
This shift is especially noticeable in Auckland, where the number of remote workers more than doubled from 2018 to 2023. With the high cost of living in central Auckland, many are eyeing the outer suburbs for more affordable housing options. Areas like Albany, Long Bay, and Northcross on the North Shore, along with Manukau and Mount Roskill in the south, are becoming popular choices.
Auckland's investment in infrastructure, such as the Northern Busway and the City Rail Link, is making these outer suburbs more accessible. This is a big plus for those who can work from home and don't need to commute every day. Improved transport links are a game-changer for suburban living.
There's a growing interest in suburban properties, driven by the demand for larger homes with dedicated office spaces. Suburban homes with office spaces are in demand, and this trend is supported by government initiatives like the Large-scale projects initiative, which aims to renew neglected suburbs and speed up the delivery of new homes.
Real estate market analyses highlight this shift, showing that suburban properties are becoming hot commodities. The government's focus on renewing suburbs is also playing a role in this trend, making these areas more attractive to potential buyers.
As remote work becomes more common, Auckland's outer suburbs are set to experience a surge in demand. This is a great opportunity for those looking to invest in property outside the city center.
Sources: OneRoof, Wikipedia, HUD, RNZ
12) Queenstown’s luxury real estate market will rebound with the gradual return of international tourism
Queenstown's luxury real estate market is bouncing back as international tourists start to return.
In 2024, New Zealand welcomed more overseas visitors, with a 6.3% increase in arrivals from places like Australia, the U.S., Singapore, and the U.K. This surge is vital because it nudges Queenstown closer to its pre-pandemic visitor numbers, which were at 85% of 2019 levels.
Queenstown's luxury hotels are seeing more guests, a sign that the town is becoming a year-round hotspot. This uptick in occupancy rates suggests a strong comeback in tourism activities. Plus, with more flights heading to Queenstown, it's easier than ever for international travelers to visit, boosting the local tourism scene.
There's also a buzz among international buyers, especially from the U.S. and China. As more visitors from these countries return, so does their interest in Queenstown's real estate. This renewed interest is partly due to glowing media coverage that paints Queenstown as a top spot for luxury real estate, thanks to its stunning landscapes and lifestyle perks.
Sources: Trading Economics, QLDC Report, IQNZ Market Report
13) Christchurch’s eastern suburbs will gain appeal with ongoing urban regeneration projects
Christchurch's eastern suburbs are on the rise, thanks to ongoing urban regeneration projects.
These projects are a big deal for the Christchurch City Council, which is all in on boosting residential areas both downtown and in the suburbs. Take the SE Central Neighbourhood, for instance—it's been buzzing with new homes and businesses popping up, transforming the area into a lively hub.
Property values are climbing in these revamped spots. Suburbs like Aranui and Kennedys Bush have seen property value jumps of over 8% in the past year. This uptick shows that these areas are becoming hot spots, signaling a bright future for Christchurch's eastern suburbs.
Better infrastructure and public amenities are also making these suburbs more appealing. The Ōtautahi Transport Plan is set to boost public transport connections, making it a breeze for residents to get around. Plus, the Urban Forest Plan is all about greening the city with more trees, which means cleaner air and more parks to enjoy.
With these changes, the eastern suburbs are not just getting a facelift; they're becoming places where people want to live and invest. The focus on improving transport and green spaces is a game-changer, making these areas more livable and attractive.
Sources: Waimakariri District Council, Opes Partners, Christchurch City Council
14) Auckland's infrastructure projects will boost connectivity and increase demand in nearby suburbs
Auckland's infrastructure projects are reshaping the city and boosting property demand in nearby suburbs.
One of the standout projects is the $5.5 billion City Rail Link, a massive undertaking that's nearly complete. By November 2025, this project will transform the Britomart Transport Centre into a bustling two-way station, connecting the entire Auckland rail network. This means more trains, more often, and a passenger capacity of 54,000 per hour during peak times.
With these improvements, suburbs around Auckland are becoming hot property markets. People are eager to live in areas with easy access to the city, and this is driving up property prices. It's not just about convenience; it's about being part of a connected community.
Public transport in Auckland is seeing a resurgence, with nearly two million trips on buses, trains, and ferries in February 2024. This is the highest level of usage since before the pandemic, showing that people are embracing the improved connectivity.
For those considering buying property, these infrastructure projects are a game-changer. They not only enhance the quality of life but also make commuting a breeze. Imagine cutting down your travel time significantly and having more time for what truly matters.
As Auckland continues to invest in its infrastructure, the surrounding suburbs are set to benefit even more. This is a golden opportunity for property buyers looking to invest in areas with promising growth potential.
Sources: NZ Herald, ConsultANZ, Beehive
We have made this infographic to give you a quick and clear snapshot of the property market in New Zealand. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
15) Virtual reality tours will become a standard in property marketing to attract tech-savvy buyers
Virtual reality tours are now a staple in property marketing, especially for those who love tech.
Imagine exploring a potential new home without leaving your couch. Thanks to the booming virtual tourism market, this is becoming a reality. The market is growing fast, with numbers jumping from $10.52 billion in 2023 to $12.38 billion in 2024. This surge is largely because real estate is embracing VR and AR technologies, offering immersive tours that let you see every nook and cranny of a property.
For many home buyers, especially the younger crowd, digital tools are a must-have. Nearly 40% of millennials feel comfortable buying a home online, and a good chunk would even consider making an offer after a virtual tour. Gen Z is on the same page, with more than one in three open to online home buying. This shift shows how digital solutions are becoming the norm in real estate.
Surveys back this up, showing that over 80% of millennials want to see 3D virtual tours and digital floor plans when shopping for a home. These virtual tours aren't just a nice-to-have; they’re driving more engagement and interest from potential buyers. The data is clear: millennials and Gen Z are all in on 3D tours and digital floor plans, proving these tools are key to attracting tech-savvy buyers.
With the rise of these digital tools, the real estate market is changing. Virtual reality tours are becoming a go-to for tech enthusiasts, making the home-buying process more accessible and engaging. As more people get comfortable with this technology, it’s clear that virtual tours are here to stay.
Sources: 360 Virtual Tours New Zealand, PR Newswire, Globe Newswire
16) Interest in properties with sustainable features will grow due to climate change concerns
Climate change is reshaping the real estate market, with a growing interest in sustainable properties.
In New Zealand, there's a noticeable shift towards homes with energy-efficient features like solar panels and rainwater systems. The solar market has boomed, tripling its capacity from 90 MW in 2018 to 270 MW by 2023. This surge shows that people are not just aware of renewable energy benefits; they're ready to invest in them for their homes.
Buyers are increasingly seeking energy-efficient homes, driven by a desire to be more environmentally friendly and reduce their carbon footprint. The New Zealand government supports this trend by promoting green building practices and setting healthy home standards, encouraging more people to consider sustainable properties.
Media stories often highlight the financial perks of sustainable living. For instance, a sustainable home recently sold for $2.22 million, far above its valuation due to its eco-friendly features. Such coverage not only raises awareness but also shows that sustainability can boost property values.
As more people recognize the benefits of eco-friendly homes, the demand for properties with sustainable features is expected to grow. This trend is particularly evident in regions where environmental concerns are a priority, and buyers are willing to pay a premium for green credentials.
With climate change concerns on the rise, the real estate market is likely to see a continued interest in sustainable properties. This shift reflects a broader societal move towards more responsible and eco-conscious living.
Sources: Statista, OneRoof, RatedPower
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.