Big picture

The housing market in 2024 was about as exciting as watching paint dry.

Falling interest rates were offset by record consumer prices and labour market uncertainties.

The sentiment flowed through to house values, which ended the year little changed from the start of the year, according to QV House Price Index data.

But 2025? Things could get spicy.

By the numbers

  • Westpac’s betting on an 8% price jump in house prices
  • CoreLogic’s playing it safer at 5%
  • ANZ’s splitting the difference at 6%
  • Expected transactions: 90k (up 10k from 2024)

Expert take

Westpac’s chief economist Kelly Eckhold expects house prices to lift 8% over the coming year.

That’s a decent bump, though nothing like the crazy 15-20% annual gains we’ve seen before. Think “healthy growth” rather than “crypto-style moonshot.”

Why the lift in prices?

  • Interest rates continue to drop – already this year Kiwis are seeing interest rates almost in the “4s” again after ASB cut one of its most popular fixed term loans to 5.39%. The bank announced changes to three of its most popular rates a day after Westpac cut one of its key rates in a bid to match BNZ. “A lot of the housing market indicators have shown a pretty significant turnaround because interest rates have fallen quite a long way very quickly,” Eckhold said.
  • Consumer confidence is making a comeback
  • The job market should stop deteriorating by Q2. The unemployment rate is expected to peak in the second quarter of this year.

But wait, what about renters?

Plot twist: The rental market is actually chilling out. After years of rent rises, rent increases are finally taking a breather.

Why?

  • Slower population growth (fewer immigrants = less rental pressure)
  • Wages aren’t growing as fast
  • More rental properties hitting the market

In any case, rents were rising at unsustainable levels.

“What we have seen in 2024, is rents decelerate… that’s been a feature of a few things, there’s been lower population growth – last year we had a big flow of migrants into the country and a lot of those people came into rental properties. We don’t have the same impetus this year,” Eckhold said.

He added that people might be willing to pay more in rent as the economy improved, but the market was unlikely to take off.

The bottom line

2025 is looking like the year housing decides to wake up and choose growth. But don’t expect the insane price rockets of years past – think steadier ascent.

Pro tip: If you’re thinking about building new, the rules are different. LVR and debt-to-income restrictions don’t apply to new builds. But make sure your builder isn’t going to pull a Houdini mid-construction.

Listings are on the rise and buyers are busier. Call 0800 GOODWINS to gauge the market in your part of Auckland.