Floating Rates Rise as Wellington Listings Surge

More Wellington homeowners are choosing floating mortgage rates as property listings hit a six-year high. Find out what’s driving the market shift in 2025.

Positive momentum continues to build in New Zealand’s housing market, with a growing number of homeowners in Wellington and beyond opting for floating mortgage rates over fixed terms.

Recent figures show that almost one-third of Kiwis (31.8%) are now choosing a variable interest rate, betting that the Reserve Bank of New Zealand (RBNZ) will deliver further cuts in the months ahead.

Industry experts suggest that after enduring a tough couple of years, marked by high interest rates and falling property values, many homeowners are welcoming the flexibility that floating rates provide. Floating rates allow borrowers to take advantage of any future interest rate drops without the cost of breaking a fixed loan early.

Adding fuel to the trend, Westpac recently became the first major bank to drop its retail rates below 5%, sparking predictions of a potential mortgage rate war across New Zealand’s lenders. Other major banks are expected to follow, creating more competition and giving borrowers even more options.

CoreLogic NZ’s chief property economist, Kelvin Davidson, supports the idea of growing competition among banks. He recently noted that competitive fixed-term rates could soon tempt some borrowers back to locking in, but for now, floating remains attractive.

Davidson also shared some promising news for homeowners:

“We’re starting to see signs that the property market downturn is reversing. We expect a nationwide property value increase of around 5% over the next year.”

According to Davidson, Auckland, Christchurch, and Dunedin are currently leading the charge, but Wellington’s real estate market is also beginning to show fresh signs of life, particularly in key suburbs close to the city centre.

Listings Hit a Six-Year High

In another major development, the number of properties for sale across New Zealand has reached its highest level since 2018.

CoreLogic’s latest survey reports listings are now 26% above the five-year average — a significant jump that’s giving buyers in Wellington much more choice.

More listings mean buyers can afford to take their time. In Wellington, many buyers are attending multiple open homes, comparing properties carefully, and negotiating harder. This is creating a more balanced market compared to the frenetic pace seen during the boom years.

While more stock on the market typically eases price pressure slightly, well-presented and well-priced homes are still achieving good results.

What Sellers in Wellington Need to Know

FoIf you’re considering selling, it’s important to adjust your strategy to meet today’s market conditions:

• First impressions matter.
  Professional staging, high-quality photos, and minor repairs can make a big difference.
• Price realistically.
  Buyers have options, and they’re less willing to engage with overpriced properties.
• Be flexible.
  Understanding what buyers want, whether it’s a quick settlement, flexibility on move-in dates, or certain inclusions, can help you negotiate a better deal.

Sellers should also remember that while they might not hit peak 2021 prices, they can often buy their next property at similarly adjusted levels. As the saying goes, “what you lose on the swings, you gain on the roundabout.”

Holding out for an unattainable price might leave your property sitting on the market for months — and could ultimately cost you more.

Quick Snapshot: Latest CoreLogic Data

• Total market value: $1.64 trillion
• Predicted residential growth for 2025: 5%
• Total property sales in the past year: 82,757
• Current property listings: 26% above the five-year average
• Gross rental yield: 3.9% (the highest since mid-2015)

Final Thoughts

With floating rates gaining popularity and property listings on the rise, Wellington’s real estate market is entering a new phase of opportunity. Whether you’re buying, selling, or refinancing, staying informed and flexible will be key to making smart moves in 2025.

If you’re thinking about making a change, speak to a local Wellington real estate expert who can help you navigate this evolving market.