Will NZ house prices jump or crash? A 2025 property price forecast

According to forecasts from Kiwibank and ANZ, we might see significant cuts to interest rates in 2025. Kiwibank’s economists expect the official cash rate to fall to about 4.5%, which could make mortgages more affordable for Kiwis. Lower interest rates mean that monthly repayments could ease up, opening the door for more buyers to enter the market.

Moreover, a surge in new housing supply, particularly in places like Auckland, could help balance things out, making homes more accessible. This means if you’ve been sitting on the fence about buying, it might be worth keeping an eye on these developments.

Read our full guide on buying property in NZ.

New Zealand's property market has been showing resilience, with many regions experiencing an uptick in house prices. The demand is strong as buyers are looking to secure homes before more potential interest rate cuts. Here are the key highlights from Opes Partners:

• Hawke's Bay: In Napier City, median house prices have seen an increase to around $725,000, signalling a positive trend for homeowners looking to sell
  This area has benefited from an influx of buyers, contributing to rising prices.
• Waikato Region: Hamilton City is also enjoying a boost, where the average house value in the premium suburb of Harrowfield is approximately $1,079,650. This is good news if you own a property in the area and are thinking about selling.
• Thames-Coromandel: The suburb of Pauanui tops the charts with a staggering average value of $1,509,900. Properties in this region are becoming increasingly sought after, making it an excellent time to consider selling if you live here.
• Wairoa District: For those in Wairoa, the prices remain more accessible at around $156,500, but even this area is seeing upward movement.

While many areas are experiencing price increases, there are still regions with little to no change in house prices. This can differ a lot from one suburb to another, creating chances for buyers to find good deals.

Browse house listings in your desired area.

Several factors are driving house prices up in 2025, according to NZ economists. Let’s break them down:

Population growth: Last year, ASB estimated New Zealand’s population grew by around 150,000 — roughly the size of Dunedin. More people means more demand for housing, which is likely to keep prices on the rise.

Decreasing interest rates: Interest rates are starting to drop, which makes it a little easier for buyers to get into the market. This could give house prices a gentle push upwards.

Investor-friendly policies: The government’s new policies — like reducing the bright line test to just two years (from 10) and reinstating mortgage interest deductibility — are giving investors a little more incentive to jump into the property game, which could put more pressure on prices.

Slowing construction rates: While we saw lots of residential construction in 2024, things are slowing down in 2025. Building consents were down last year, which means fewer new homes on the market, making the ones that are available more valuable.

Rising disposable income: As inflation cools off, households might find they’ve got a little more cash in their pockets. This could mean more people are able to enter the housing market, keeping demand—and prices — up.

But don’t forget, it’s not all smooth sailing. Affordability is still a big issue; the economy is cooling, and with unemployment expected to rise, house prices could face some challenges ahead. For example, Auckland house prices have just hit a four-year low.