Brought to you by Senior Research Analyst Wayne Shum
State of the nation: an overview of the New Zealand property market for the three months ending May 2025
New Zealand’s property market remains stable despite easing mortgage rates improving affordability, with a subdued winter outlook ahead. The national Valocity Value showed minimal movement, increasing marginally by 0.16% over 2025 so far, while rising from $966,000 three months ago to $969,000 in May. Despite mortgage rate cuts improving affordability, potential buyers remained on the sidelines. With inventory levels high, many do not feel the urgency to act as we enter winter.
The weaker employment market and low net migration has contributed to the subdued value growth. The unemployment rate remained steady at 5.1% for the quarter ending in March 2025, despite earlier projections of an increase. Meanwhile, the labour cost index (wages and salaries) rose by 2.9%, from 3.3% for the 12 months ended December 2024.
Low net migration continued to suppress both rental and purchasing demand. The national medium rent has remained the same for the past seven months, with rental incentives such as supermarket vouchers or rent-free periods, becoming increasingly common.
Five of the 16 regions, including Auckland, Wellington, and the Bay of Plenty, recorded minor value declines over the past quarter. In contrast, Canterbury continued to outperform the North Island cities.
As widely expected, the RBNZ cut the Official Cash Rate to 3.25% at the end of May. While mortgage rates have eased and are expected to fall further, the forecast decline towards 4.5% at the end of the year will provide limited additional purchasing power from the current 4.99%. Existing borrowers have shifted from short-term fixes or floating terms at the end of 2024 to one and two-year fixes in March, taking advantage of the lower rates.
The 2025 Budget contained few immediate implications for house prices, though increased long-term spending on infrastructure is expected to support broader economic growth over time.
There are new signs of increased activity from potential first-home buyers. The withdrawal of Kiwi Saver for First-Home purchases in March was the highest monthly volume since November 2021. The cash difference between a mortgage and rental has been narrowing in the main cities, potentially inducing a few First-Home Buyers to opt for purchasing over renting.
Two pending legislation amendments are expected to impact both the building industry and the property market. The first proposed scheme is allowing” Granny Flats” to be constructed without consents, subject to design requirements (maximum of 70 sqm). The second proposal is the self-certification of new buildings. Both policies may reduce the cost of increasing house supply and are anticipated to be implemented by the end of 2025.
Looking ahead, the pace to recovery is expected to remain gradual. With a third of the year passed, the Valocity Value grew by 0.16%, indicating that the annual growth is likely to be minimal in comparison from 2020 to 2022. Property values experienced minor declines in both 2023 and 2024.
Figure 1: Valocity Value – New Zealand
Figure 2: Valocity Value Movement
Figure 3: Valocity Value Index and One-year Fixed Rate
Figure 4: Rate of Change – New Zealand
|
Value Now – New Zealand |
Value – Three Months Ago |
Quarterly Change |
Quarterly Change – Three Months Ago |
Value Six Months Ago |
Value One Year Ago |
|
$969,000 |
$966,000 |
0.3% |
0.5% |
$961,000 |
$974,000 |
In Q1 2025, the national median sales price declined to $760,000. The number of listings remained high, while both sales volume and prices are expected to stay subdued over the winter months.
Figure 5: Median Sales Price (settled sales only)
The net migration for the year ended in March 2025, and fell to 26,400, down from 100,400 in the previous 12 months. This was the slowest gain since the end of 2022, and there was a record loss of 70,000 New Zealanders during the 12 months.
Figure 6: Net Migration – Stats NZ
Construction
Building consent volumes have continued to decline in recent months. In the 12 months to March 2025, 34,062 new homes were consented, a 3.3% drop compared to the previous year.
Figure 7: Composition of New Homes Consented – Stats NZ
Things to watch
- The inventory levels remain elevated and are expected to stay high throughout the winter months, continuing to dampen any potential price recovery
Valocity values
| Region | Value now | Value – 3 months ago | Quarterly change | Quarterly change – 3 months ago | Value 6 months ago | Value 1 year ago |
| Auckland | $1,299,000 | $1,302,000 | -0.2% | 1.2% | $1,287,000 | $1,314,000 |
| Bay of Plenty | $957,000 | $958,000 | -0.1% | 1.5% | $944,000 | $960,000 |
| Canterbury | $797,000 | $788,000 | 1.1% | -0.1% | $789,000 | $789,000 |
| Gisborne | $675,000 | $668,000 | 1.0% | 2.1% | $654,000 | $653,000 |
| Hawke’s Bay | $789,000 | $790,000 | –0.1% | -0.1% | $791,000 | $806,000 |
| Manawatu-Whanganui | $600,000 | $600,000 | 0.0% | -0.2% | $601,000 | $607,000 |
| Marlborough | $768,000 | $752,000 | 2.1% | -0.1% | $753,000 | $772,000 |
| Nelson | $805,000 | $812,000 | -0.9% | 0.6% | $807,000 | $810,000 |
| Northland | $820,000 | $814,000 | 0.7% | -0.9% | $821,000 | $845,000 |
| Otago | $1,010,000 | $992,000 | 1.8% | 0.2% | $990,000 | $973,000 |
| Southland | $557,000 | $545,000 | 2.2% | 1.1% | $539,000 | $552,000 |
| Taranaki | $703,000 | $701,000 | 0.3% | 1.3% | $692,000 | $697,000 |
| Tasman | $959,000 | $950,000 | 0.9% | 1.8% | $933,000 | $945,000 |
| Waikato | $909,000 | $904,000 | 0.6% | -0.4% | $908,000 | $911,000 |
| Wellington | $856,000 | $859,000 | -0.3% | -0.6% | $864,000 | $902,000 |
| West Coast | $487,000 | $485,000 | 0.4% | 2.1% | $475,000 | $469,000 |
On the horizon
- Release of the Auckland Council General Revaluation – June 2025
- Release of the Hamilton City Council General Revaluation – June 2025 (tentative)
- Release of GDP figures – 19th June 2025
- Release of Consumer Price Index – 21st July 2025
- Release of Unemployment Statistics – 6th August 2025
For further information, or if you would like to understand more about New Zealand housing market insights please contact wayne.shum@valocityglobal.com.