Market Update: Green Shoots or False Spring?

House prices are up for the second month running, first-home buyers are busy, and the big banks are bullish.
But it’s not 2021 all over again.

National house prices rose by 0.2% in October, marking the second consecutive month of growth after five months of declines. The national median now sits at $811,662, according to CoreLogic, while OneRoof pegs the average property value at $958,000 (down $12,000 over the quarter, but the rate of decline has slowed dramatically).

The South Island is charging ahead, while Auckland and Hamilton are finding their feet.

Queenstown-Lakes jumped 1.2% to a record $2.11 million (big-ticket sales and anticipation around foreign buyer rule changes), and Christchurch hit a new high of $805,000 (up 0.4% quarterly, 3.9% annually).

Meanwhile, Auckland’s median fell 0.2% to $1,051,796 (though Franklin and North Shore saw tiny gains), and Hamilton flatlined (with Beerescourt down 5.3%, Maeroa down 4.7%).

Auckland investors must be patient — the market’s stabilising, but Waitākere (-0.7%) and some city submarkets are still cooling. With values remaining around 17% below the early 2022 peak, some investors will smell opportunity.

First-Home Buyers Are Surging

More than one-in-four (27.7%) property purchases in Q3 2025 were made by first-home buyers (FHBs), beating the previous high of 26.9% recorded in Q4 2024.

In some regions, the percentage of FHBs is even more pronounced: Wellington (36%), Rotorua (32%), Southern Waikato and Timaru (28%).

They’re hunting in affordable price brackets, paying well below CoreLogic’s $811,662 national median price.

FHBs have a strong wind at their backs

• Mortgage rates have plummeted – one-year fixed rates are nearly 150 basis points lower than last year
• LVR rules are favourable – average loan-to-value ratios for first-home buyers have nudged up to 79% (from under 75% three years ago)
• Choice is abundant – listings are at an 11-year high for September (30,721 properties available)
• KiwiSaver access continues to help with deposits, and banks are operating comfortably below LVR speed limits

Landlords now face stiffer competition at the lower end of the market. FHBs are cashed up, motivated, and they’re not buying for yield — they’re buying for lifestyle. If you’re shopping in the $700,000–$900,000 range, expect multiple offers.

On the flip side, this is positive news for your rental portfolio’s demand dynamics. As FHBs step into ownership, rental supply could tighten.

Big Banks Are Changing Their Tune

ANZ, Westpac, and ASB are now forecasting house price increases for 2026, citing falling interest rates as the primary driver, though they acknowledge counterforces including weak near-term momentum, elevated inventories, and a soft jobs market.

• ANZ expects house prices to stay “broadly flat” through the remainder of 2025, then rise around 5% over 2026 as the OCR reaches 2.25% by year-end.
• Westpac anticipates a modest lift in prices over the next few months, picking up to a 5% rise over 2026 off the back of an improving economy, higher net migration, and a reduction in the backlog of unsold homes.
• ASB’s chief economist Nick Tuffley says the market is “still pretty flat,” but those tiny monthly increases are “a sign that things might be heading in the right direction.” The key, he says, is increasing sales turnover to reduce overall listings: “That’s when you’re likely to see a bit more upward price pressure.”

CoreLogic’s Kelvin Davidson expects “only a modest rise in prices of perhaps 5% or less” rather than a fresh boom. With housing stock elevated relative to population and debt-to-income ratio caps now in action, a repeat of 2020–21 is unlikely. He’s forecasting a 25-basis-point OCR cut on November 26, which could mark the end of the cutting cycle.

Few property investors will be licking their lips at the prospect of a 5% increase, but it’s a hell of a lot better than the 17% decline from the 2022 peak. If you’ve been sitting on the sidelines waiting for “the bottom,” economists say we’re probably there — or close. The next 12–18 months look like a gentle upward trajectory — ideal for investors. You can still buy at reasonable prices without the FOMO frenzy.

Sales Activity Up, Inventory Still Sky-High

REINZ data shows 6,346 sales across NZ in September, up 3.1% year-on-year (7.5% if you exclude Auckland). Month-on-month there was a seasonally adjusted drop, but the median days to sell fell by six compared to 2024, landing at 43 days.

Realestate.co.nz recorded 9,394 new listings in September — the highest September figure since 2020. Total stock for sale hit 30,721 properties, an 11-year high for September and up 74.8% compared to September 2020.

More listings give buyers the upper hand in negotiations, which is why asking prices are only up 0.8% month-on-month despite spring market activity.

Auckland sales were subdued, contributing to the modest national increase. ANZ economists noted that when seasonally adjusted, there’s been “little movement over the year.”

The OCR, Mortgage Rates, and What’s Coming Next

The Reserve Bank is expected to cut the OCR by 25 basis points at its November 26 meeting, bringing it to 2.25%. Most economists agree this could mark the end of the cutting cycle — or at least a pause.

Mortgage rates have already fallen significantly, with widespread rollovers onto lower rates boosting household spending power through 2026. Westpac’s Satish Ranchhod notes:

“Over the year ahead, widespread mortgage rollovers onto lower rates will boost households’ spending power, suggesting the Official Cash Rate will likely move to an ‘on hold’ stance in 2026.”

Housing affordability is “more favourable” than it’s been in years, according to Davidson. Lower rates plus 17% price declines from peak equals opportunity. But with debt-to-income caps now in effect, borrowing constraints remain for some buyers.

Landlords holding interest-only loans or loans coming up for renewal will be smiling. Refixing at current rates will free up cash flow, which they can either pocket or reinvest. Just remember: rates are unlikely to fall much further from here. So, if you’ve got a 12-month fix coming up, consider locking in for 2–3 years to capture the current lows.

The Right Price Matters

If your property isn’t priced right, it’s not going to sell. The market isn’t forgiving overpriced listings right now. But if you’re realistic about value and your property presents well, there are buyers out there. Spring activity has sprung, and agents are reporting cautious optimism heading into summer.

Close to one quarter (24%) of Auckland suburbs now have an average property value under $1 million — up from just 7% at market peak. This is a dramatic affordability shift. While the likes of Freemans Bay, Saint Marys Bay, and Māngere Bridge suffered quarterly value declines exceeding 5%, other parts of the city are becoming accessible again for first-home buyers and strategic investors.

The top end is also changing: Waiheke Island ($3.62m) has knocked Herne Bay ($3.59m) off its perch as NZ’s most expensive suburb. Coatesville, Whitford, and Omaha round out the $3m club.

Affordability shifts open doors
Suburbs that were priced out of reach for yield-focused investors during the boom are back in play. If you’re crunching numbers on a $900,000 Auckland property with $650/week rent, the math suddenly works at 6% mortgage rates in a way it didn’t at $1.2m and 7% rates.

ASB’s house price surveys show many people think it’s a good time to buy a house — interesting, given that sentiment has been tilted toward caution for most of 2025.

The economy and labour market are still subdued, unemployment is rising, and there’s genuine uncertainty out there. Yet housing activity is picking up, and prices are edging higher.

Position Yourself

If you’re buying:
You still have negotiating power thanks to high inventory, but that window might shrink as sales volumes increase. First-home buyers are your competition in the sub-$800k bracket. Regional markets are diverging: South Island properties are appreciating; Auckland and Hamilton are stabilising. Economists are calling the bottom (or near-bottom), with modest 5% growth forecast for 2026. Lock in current mortgage rates — they’re unlikely to drop much further.

If you’re holding:
Your properties are likely worth 17% less than they were in early 2022, but values are stabilising or beginning to rise. Cash flow should improve as fixed-rate mortgages roll onto lower rates. Rental demand could strengthen as first-home buyers grow in number (27% of buyers are FHBs). Be prepared for potential CGT discussions if Labour gains traction in 2026 polling.

If you’re selling:
Price it right or prepare to wait — the market isn’t forgiving overpriced listings. Spring is busy, but buyers are taking their time and doing their homework. Your best buyers are first-home buyers (if you’re under $800k).

Numbers to Watch in December

As we head into the final month of 2025, watch for:

• The November 26 OCR decision: 25-basis point cut expected — but is it the last one?
• December 1 LVR changes: how much low-equity lending flows through?
• Spring sales volumes: are they sustaining momentum or seasonal?
• Auckland’s performance: is the Super City finally finding its feet?
• FHB share: can they maintain their 27%+ market presence?

Need advice on property management or what current market conditions mean for your portfolio?
The team at Goodwins is here to help. Call us: 0800 GOODWINS