Momentum Is Building

Welcome to the April edition of ON THE MARKET, where we unpack the forces shaping the New Zealand property market in 2025. 

After a period of economic uncertainty, the real estate market is gaining momentum. Key indicators are aligning: net migration is surging, property sales volumes are increasing, and global trade challenges are creating real estate opportunities for savvy property investors.

While headlines may focus on volatility, a new property cycle is taking shape. For those who act early, this is a prime window to secure long-term capital growth in a market resurgence. Let’s explore the property trends redefining the New Zealand property market.

Net Migration Still Improving  

After falling sharply in 2024, New Zealand’s net migration trend is now reversing course. The country recorded a provisional net gain of 32,900 migrants in the year to February 2025, with February itself seeing the strongest inflow in over a year. 

This signals a renewed vote of confidence in New Zealand as a destination for skilled workers, students, and returning citizens alike, many of whom contribute directly to housing demand. 

Implications for the New Zealand Property Market:

• More Tenants: Most new migrants rent initially, increasing demand for rental accommodation. 

• Higher Rental Prices: Increased tenant competition places upward pressure on rents, especially in high-demand areas like Auckland and Tauranga. 

• Potential for Capital Growth: Sustained population growth tightens the housing supply, supporting property value increases over time.

Property Sales Volumes Rising 

Property sales volumes surged in March 2025, with national figures up 12.8% year-on-year and Auckland recording a 25.6% month-on-month increase.

This trend is a strong indicator that market confidence is building as more buyers re-enter the market. It also suggests we may be at the front end of a new property cycle upswing.  

The graph below reveals that the traditional cycle low point for sales volumes (highlighted “o”) occurs during the cycle’s Slump phase. This cyclical low point is always followed by a surge of sales volumes which in turn leads to property price rises.

Why It Matters: 

Sales volumes typically bottom out during a Slump, then surge, driving property values up by 10% or more annually. This pattern makes volume a key early signal for rising property values.

Contributing Factors: 

• Lower Interest Rates: With the OCR cut to 3.75% and speculation of further reductions, borrowing is cheaper, fuelling buyer activity. 

• Economic Recovery: New Zealand exited recession in Q4 2024, with GDP growth of 0.7%, lifting consumer sentiment and spending. 

• Market Confidence: Increased listings and better affordability have created more momentum across major centers. 

Trade Tariff Tensions: A Hidden Opportunity? 

The introduction of a 10% tariff on some New Zealand exports to the US has stirred concern in trade circles, but it also highlights an investment opportunity. With global supply chains shifting and countries diversifying their trade relationships, New Zealand is well-positioned to forge deeper connections with fast-growing markets across Asia and Europe. This shift could spark innovation and investment in new sectors.

Impact on Property and the Economy: 

• New and Stronger Trade Alliances: With reduced reliance on the US market, New Zealand is exploring expanded trade with Asia-Pacific and European partners, potentially diversifying and strengthening its economic base. 

• Positive Economic Diversification: As exporters adapt and pivot, New Zealand may benefit from increased investment, innovation, and demand in alternative industries. 

• Mortgage Interest Rates May Fall Further: If the current global trade tensions result in slowing the NZ economy then we may well see even lower mortgage interest rates than forecast (i.e. we may reach low 4% mortgage rates!) 

• Resilient Property Sector: Low interest rates, strong migration trends, and long-term investor confidence underpin the New Zealand property market.

• Investor Advantage: Economic realignments reward early movers. Property investors acting now can secure a strategic edge.

How Much More Can You Borrow Now? 

You might be pleasantly surprised at how much your borrowing power has increased. Falling mortgage rates over the past six months mean you could now afford more than you think. 

Want to Know More? 

Get in touch with our Mortgage Team today for your free borrowing capacity assessment and discover your updated investment potential. Explore more insights and tools in our Guides and Resources hub to help shape your next investment move.

Stay ahead of the market. Stay informed. Invest with confidence.