NZ house price predictions from economists (2025)

In a 14 November insights article, Kiwibank Chief Economist Jarrod Kerr said the market has been stumbling sideways, but it’s about to change its tune:

“The surge in migration and the loss of dwellings at high risk of climate change will only exacerbate the housing shortage. The Government will play a big role. Any added infrastructure spend or incentives for new builds will also be welcomed. Interest rates are playing a larger role, from now.“

“Our best guess is house prices will rise by 5-to-7% over 2025. Call it 6% to sound precise.”

In their November/December Property Focus, ANZ described the forces at play in the market but explained (rather humbly) that they could well be wrong:

“While lower interest rates and easing credit conditions are strong tailwinds for housing demand, the recovery faces plenty of headwinds too, with labour market conditions continuing to deteriorate, population growth slowing, and affordability stretched.”

“All told, we certainly wouldn’t be surprised if our forecast weren’t to come to fruition (this is the housing market after all!)”

While the other forecasts we’ve shared were provided in late 2024, ASB’s predictions are from their August Quarterly Economic Forecast. We’re still waiting on a new one, but that report said interest rate decreases are a key factor:

“We now expect house prices to be pretty flat over the rest of 2024, but lift reasonably strongly in 2025 as falling interest rates spur added interest.”

In an October news article, CoreLogic Chief Property Economist, Kelvin Davidson, said that while we may be near the end of house price decreases, we shouldn’t expect another boom:

“I’d be cautious of assuming that the end of a downturn suddenly means the start of the next upturn. Reasons for caution include still-stretched housing affordability in most parts of the country, an elevated stock of listings on the market, and the weaker employment figures that are now showing through.”

He adds that DTIs will limit any rapid upturns and he expects any increases to be slow and steady:

“So, the scene looks set for a rise in sales volume and house prices in 2025 to some degree, but a full-blown ‘seller’s market’ seems unlikely as long as the economy remains weak and jobs are being lost.”

The Reserve Bank of New Zealand didn’t provide a lot of meat on the bones of their most recent property price forecast, but they did indicate that they expected house price growth to peak a little higher than expected back in August. The central bank see prices increasing by roughly 7% by late 2025, then increasing at a lower rate after that. 

The experts all agree that house prices are going to increase on average in 2025, but who’s right? 

If we average their forecasts out, we get 7.1%, so that’s a good guess. That said, we think it’s safer to say that prices may increase by somewhere in the realm of 0% to 10% if nothing unexpected happens. 

It’s important to note that we’re talking about national averages here. Some cities, regions and suburbs may experience more growth than others, or even see average price decreases. 

The main driver behind house prices is usually interest rates. Right now they’re high-ish, but they’re expected to steadily decrease over 2025, which should add upward pressure to house prices. 

Read interest rate predictions from experts and economists for 2025. 

Other factors that are influencing the housing market in NZ right now include:

• Inflation and the rising cost of goods means Kiwi are less able to afford to service a mortgage, so banks may be lending a little less.

• The brightline test is back to two years and interest deductibility is allowed again, meaning investors are returning to the market, which may put upward pressure on prices.

• Population increases of around 90,000 per year is driving up demand for housing, particularly in main cities like Christchurch and Auckland. 

• The economy is a little sluggish right now after two recessions. Unemployment is a bit high and people are uncertain about the future – which may decrease demand for housing. 

On balance, these factors are weighted ever so slightly in favour of house price increases, but if something changes the opposite could happen. For example, if inflation were to rear its head again and interest rates increased all of the above forecasts would most likely be wrong. 

The banks and economists don’t tend to provide house price predictions by city or region, so instead we’ve shared relevant data that should help you make informed decisions, starting with the Trade Me Property Price Index (find the latest edition under the second heading on this page). 

The index should give you a good idea of where prices are right now and how they’ve been behaving in the last year. 

Tony Alexander is one of New Zealand’s foremost economists and property market commentators. He’s reluctant to provide predictions by city or region, but he did share data he thought was relevant:

Population growth rates between 2023 and 2048 from Statistics NZ (%)

• Northland 16.0

• Auckland 29.5

• Waikato 20.4

• Bay of Plenty 16.5

• Gisborne 6.4

• Hawke's Bay 11.2

• Taranaki 9.2

• Manawatu-Wanganui 7.0

• Wellington 10.5

• Tasman 10.9

• Nelson 5.0

• Marlborough 3.3

• West Coast -5.8

• Canterbury 18.0

• Queenstown Lakes 35.5

• Dunedin City 4.3

• Southland 4.3

Generally speaking, population growth leads to increases in demand, which puts upward pressure on prices. So based on this, Northland, Auckland, Waikato, Bay of Plenty, Canterbury and Queenstown Lakes are looking promising.

Another prominent property commentator, Ed Mcknight at Opes Partners, used data to work out whether or not each region is over or undervalued. He sees Queenstown Lakes District as massively overvalued (by 34%) and Bay of Plenty as overvalued (4.27%), whereas Northland is about right. Auckland, Canterbury and Wellington however, are undervalued, according to his data.