The year housing gets exciting again

New Zealand’s housing market has been on a journey, and at times, a wild one. We’ve had the fastest upswing on record, followed by the fastest rise in interest rates in a generation. The shifts have been big, the cycles short, and the navigation anything but easy, says Nerida Conisbee, Ray White Group Chief Economist.

However, the mood is now changing. Not with the drama of previous cycles, but with something more durable – confidence in real-world fundamentals.

PRICES RISE, FOR THE RIGHT REASONS

One of the clearest indicators of this shift is price performance. In October 2025, the national median sale value rose 1.80 per cent to $786,000 – the strongest lift in more than two years. That figure becomes even more meaningful when placed against a backdrop of two years of stabilisation.

This escalation isn’t driven by speculation; it is a steady growth born from firming demand, better affordability and households that finally have a bit of breathing room.

MORE SELLERS, MORE BUYERS, AND LESS FEAR

Activity is occurring on both sides of the ledger. Last year, New Zealand’s sales market recorded 111,580 listings – the highest level since 2021. Yet, homes are still selling rapidly, and without the urgency of the pandemic-era rush.

Kiwis aren’t listing their properties for sale out of concern; they’re listing because they’re ready to move again, which is a hallmark of a genuine cycle turn.

THE REAL GAME-CHANGER

For many households, the most significant shift has been borrowing costs. After stretching household budgets to the limit, interest rates pulled back. The Reserve Bank of New Zealand’s (RBNZ’s) most recent move brought the Official Cash Rate (OCR) to 2.25 per cent, completing a cumulative 300-basis-point easing cycle over the past two years.

Mortgage lending rates have fallen sharply from their peaks, restoring a level of affordability that has been missing since the early 2020s.

While rates are at the bottom of the cycle, with upward pressure emerging on longer-term fixed rates, the relief already delivered is significant.

It has reopened the door for first-home buyers, builders, upgraders, and investors who have been quietly waiting for lending conditions to normalise.

This housing upturn hasn’t happened in isolation, however. Inflation has eased considerably, consumer confidence is improving, and businesses are beginning to hire again. Retail spending is rising, too, and forward-looking economic indicators suggest firmer footing ahead.

RECOVERY IS NEVER EVEN – AND THAT’S NORMAL

Across the country, the pace of the uplift varies, which is a typical hallmark of a market moving out of a downturn.

• Auckland has led the resurgence, with prices up 10.80 per cent over the year.

• Christchurch and Tauranga are also showing modest but meaningful growth.

• Hamilton and Wellington are still stabilising after earlier declines.

Recoveries often begin in the largest, most in-demand centres before spreading more broadly. The fact that any major market is posting double-digit annual growth again is a clear sign that momentum is gathering – and will not remain confined for long.