Deep freeze finally over   

— Housing downturn officially toast

Prices ticked up 0.3% in February (the first meaningful increase in over a year), banks are fighting for mortgage business, and first-home buyers are back like they never left.

According to the latest data, the Kiwi property market is showing all the classic signs of a market shift. Not a boom (sorry, speculators), but definitely a bottom.

Signals sceptics can’t ignore

Tony Alexander’s latest real estate agent survey just dropped some telling numbers that even the most bearish analysts can’t brush off:

First-home buyers are hungry again. A net 55% of agents report seeing more first-home buyers (up from 48% last month). These youngsters are pouncing on the trifecta: lower interest rates, banks actually wanting to lend money, and plenty of listings to choose from.

Sellers are emerging from hibernation. A whopping 68% of agents report more potential sellers asking for property appraisals—the second highest reading in almost five years. Translation: inventory isn’t drying up anytime soon.

Mortgage anxiety is at an all-time low. Only 37% of agents say buyers are worried about getting financing—the lowest reading recorded, ever. Banks are so thirsty for mortgage business they’re actually discounting fixed rates out to three years.

By the numbers – where we stand now

  • $807,164 — Current national median home value
  • 9% — Drop from the peak in 2021/2022
  • 1% — How much values are still up from pre-Covid (March 2020)
  • 3% — February’s national value increase (small but significant)

What the experts are saying

CoreLogic’s chief property economist Kelvin Davidson isn’t surprised at the shift: “It was always likely that the property value falls in 2024 would come to an end at some stage in early 2025, given the extent of interest rate cuts since July or August last year.”

His take? This recovery won’t be a straight line, and it definitely won’t match the rocket ship trajectories of previous cycles.

Regional breakdown

  • Hamilton: The star performer (who saw that coming?)
  • Christchurch & Dunedin: Showing surprising resilience thanks to better affordability
  • Auckland: The “soft patch” appears to be over, with sentiment turning positive
  • Wellington: Bucking its weak trend, with Kāpiti Coast, Lower Hutt, and Upper Hutt all climbing
  • Tauranga: The outlier, still edging lower in February (opportunity knocking?)

Bank forecasts

The banks are all over the map with their 2025 price growth predictions:

ANZ: 6% growth | BNZ: 6.8% growth | Westpac: 7.2% growth | ASB: 3.4% growth (revised down from 9%) | Infometrics: 5.6% growth | Treasury: 3% growth

Infometrics’ Gareth Kiernan is keeping it real, suggesting affordability and debt servicing remain major constraints. His view? “We only see scope for moderate price growth this year as a result of lower mortgage rates and a turnaround in the labour market.”

ANZ’s Henry Russell calls it a “game of two halves” – soft for the first six months until inventory clears, then improving as affordability benefits kick in.

Our take

  1. The window for bottom-fishing is closing. If you’ve been waiting for “the perfect time” to buy, it’s likely behind us. The official data is always months behind market sentiment, which has already shifted.
  2. Forget FOMO, focus on fundamentals. With 68% of agents reporting more appraisals, there will be plenty of inventory. No need to panic-buy the first property you see. Affordability metrics still limit how high this market can climb.
  3. Job market recovery = the next catalyst. 44% of potential buyers are still worried about their incomes (down from 56% mid-2024, but way above the 5-year average of 22%). Watch employment stats like a hawk – late 2025 is when labour confidence could really lift the market.
  4. The townhouse oversupply is your opportunity. Auckland and Wellington are sitting on excess townhouse inventory. For investors, this spells negotiating leverage and potentially better yields than we’ve seen in years.
  5. DTI rules will cap the madness. Unlike previous cycles, the new debt-to-income rules will prevent the market from entering fantasy land. Expect steady growth, not a moonshot.

Supply-side surprise

Here’s a shocker: Annual consents have bottomed out at 33,600 – which is actually… normal? That’s 0.6% of our 5.3 million population, exactly in line with the five-decade average.

The worst that happened to home building after all those interest rate hikes was a fall to average, not below it.

Combined with intensification rules and rezoning, this sets up steady supply for years to come. For investors, this means the days of double-digit annual growth driven by scarcity are probably over.

What now?

For buyers: Target properties where vendors have genuine motivation to sell. With more listings coming, sellers who’ve already purchased elsewhere or need to relocate have reason to negotiate.

For sellers: If you’re thinking of selling in 2025, sooner might be better than later. Current low inventory in desirable suburbs creates competition, but that advantage could diminish as more listings hit the market.

For holders: Now’s the time to lock in longer-term fixed rates. Banks are offering discounts on 2-3-year terms as they compete for business, and these rates may not get much lower.

Final thought

In property, the crowd is usually right about the direction, wrong about the magnitude, and terrible at timing.

Want to dive deeper into property investment strategies? Hit reply to this email or call 0800 GOODWINS for a chat.