New Zealand Property Market Rebounds: Buyers Take Advantage of Falling Interest Rates 2025

Falling interest rates and a wide selection of homes are boosting buyer confidence across New Zealand. Discover which regions are seeing the biggest property value gains in 2025.

With mortgage rates on a steady decline, confidence in New Zealand’s property market is making a strong comeback. Homebuyers are capitalising on favourable borrowing conditions and an expansive range of listings, reigniting activity across the country.

According to the latest data, property sales have increased by 3.4% compared to the same time last year. Average home values have also edged up by 0.4% in the three months leading to March, bringing the national average property price to $970,000.

This upward trend is underpinned by recent decisions from the Bank of New Zealand, which has lowered its interest rate from 3.75% to 3.5%. The Official Cash Rate (OCR) has seen five reductions since August, falling from its peak of 5.5% in July.

While global economic concerns linger, especially with the ongoing trade tensions between the United States and China, domestic market sentiment remains largely positive. With 13% of New Zealand exports going to the US and 27% to China, any significant developments could impact our economy, but so far, the local housing market shows no signs of slowing.

The supply of properties has surged to over 40,000 listings nationwide, giving buyers plenty of choice. These elevated stock levels have also led to more realistic pricing expectations among sellers, particularly when compared to the peak pandemic period.

Regional Highlights: Property Values on the Rise

• Auckland remains the benchmark market, with a 1% rise in prices and an average property value of $1.4 million, as reported by the OneRoof-Valocity Housing Report.
• Dunedin saw one of the strongest value increases, with a 1.2% jump bringing the average home price to $680,000.
• Gisborne and Otago also posted impressive gains of 1.8% and 1.4% respectively.
  Otago has now joined the exclusive group of regions where average property values exceed $1 million, driven largely by the high-end market in Queenstown-Lakes, where the average sale price has reached $2.07 million.

The Outlook Ahead

As borrowing becomes more affordable and the market continues to stabilise, buyer optimism is likely to persist. With strong regional performance and increased property availability, 2025 is shaping up to be a promising year for both first-home buyers and investors alike.

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